10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2018

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

For the transition period from _____________ to _____________

Commission File Number: 333-190067

 

DOCASA, INC.

(Exact name of Registrant as specified in its charter)

Nevada	47-1405387
(State of incorporation)	(IRS Employer ID Number)

1901 North Roselle Road, Suite 800

Schaumburg, Illinois 60195

(630) 250-2709

(Registrant’s telephone number)

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 [X]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [  ]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

(Check one):
Large accelerated filer	[  ]	Accelerated filer	[  ]
Non-accelerated filer	[  ]	Smaller reporting company	[X]
(Do not check if a smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

As of August 23, 2018, there were 209,033,239 of common stock, par value $0.001 per share issued, issuable, and outstanding.

DOCASA, INC.

FORM 10-Q

JUNE 30, 2018

INDEX

		Page No.
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	F-2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	7
Item 4.	Controls and Procedures	7
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

TABLE OF CONTENTS

Index to Financial Statements	Page
Condensed Consolidated Balance Sheets as of June 30, 2018 and December 31, 2017 (unaudited)	F-2
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2018 and May 31, 2017 (unaudited)	F-3
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2018 and May 31, 2017 (unaudited)	F-4
Notes to Condensed Consolidated Financial Statements	F-6

F-1

Item 1. Financial Statements.

DOCASA, INC.

and Subsidiaries

Condensed Consolidated Balance Sheets

(unaudited)

	June 30, 2018			December 31, 2017
ASSETS
Current assets:
Cash	$	347,641		$	139,350
Accounts receivable		781,821			531,872
Other receivables		351			8,183
Prepaid expenses		695,030			396,041
Inventory		138,760			100,386
Total current assets		1,963,603			1,175,832
Fixed assets, net		2,600,424			1,957,650
Intangible assets, net		9,561			12,559
Other receivables		39,620			40,509
Goodwill		4,262,492			2,185,012
Deposits		283,122			233,966
Total assets	$	9,158,822		$	5,605,528
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities:
Notes payable, current portion	$	169,335		$	171,160
Accounts payable		1,579,289			869,388
Accrued expenses		1,742,707			529,324
Accounts payable to related parties		70,443			65,855
Taxes payable		244,665			120,807
Capital leases obligations, current portion		172,348			209,539
Deferred revenue		32,661			35,642
Total current liabilities		4,011,448			2,001,715
Non-current liabilities:
Notes payable, non-current portion (includes $11,164 and $11,414 to related parties for June 30, 2018 and December 31, 2017, respectively)		281,995			357,095
Capital leases obligations, non-current portion		305,403			370,681
Other long-term liabilities		290,728			1,206
Total long-term liabilities		878,126			728,982
Total liabilities		4,889,574			2,730,697
Commitments and contingencies (Note 9)
Shareholders’ deficit:
Common stock, $0.001 par value, 250,000,000 shares authorized, 160,012,875 and 160,012,875 shares issued and outstanding, at June 30, 2018 and December 31, 2017, and 47,087,125 and 47,087,125 conditionally issuable, at June 30, 2018 and December 31, 2017, respectively		209,033			207,100
Additional paid-in capital		2,386,049			758,933
Class A ordinary shares of DEPT-UK (25,000,000 shares authorized, £1 par value, 0 and 243,800 shares issued and outstanding as of June 30, 2018 and December 31,2017, respectively)		-			-
Class B ordinary shares of DEPT-UK (10,000,000 shares authorized, £1 par value, 0 and 0 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively)		-			-
Accumulated other comprehensive loss		(572,609	)		(301,958	)
Accumulated deficit		(3,422,375	)		(2,482,908	)
Total DOCASA, Inc. shareholders’ deficit		(1,399,902	)		(1,818,833	)
Non-controlling interest:
Preference shares of DEPT-UK (25,000,000 shares authorized, £1 par value, 4,319,641 and 3,557,796 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively)		5,669,150			4,693,664
Total liabilities and shareholders’ deficit	$	9,158,822		$	5,605,528

See accompanying notes to unaudited condensed consolidated financial statements.

F-2

DOCASA, INC.

and Subsidiaries

Condensed Consolidated Statements of Operations

(unaudited)

	For the three months ended						For the six months ended
	June 30, 2018			May 31, 2017			June 30, 2018			May 31, 2017
Revenue, net	$	2,091,034		$	1,163,202		$	3,914,743		$	2,084,049
Operating expenses
Direct costs of revenue		1,792,407			903,293			2,939,127			1,619,074
Professional fees		161,216			19,253			184,254			71,567
Rent		381,276			124,253			588,477			223,373
Depreciation and amortization		91,681			51,070			173,366			93,854
Property taxes		-			-			10,051			-
Other general and administrative expenses		607,903			190,821			947,101			410,933
Operating loss		(943,449	)		(125,488	)		(927,633	)		(334,752	)
Other income (expense)
Interest expense		(7,151	)		(5,241	)		(13,139	)		(9,858	)
Loss before provision for income taxes		(950,600	)		(130,729	)		(940,772	)		(344,610	)
Provision for income tax		-			-			-			-
Net loss before tax and non-controlling interest		(950,600	)		(130,729	)		(940,772	)		(344,610	)
Loss (income) attributable to non-controlling interest		1,475			(252	)		1,305			(653	)
Net loss attributable to common shareholders	$	(949,125	)	$	(130,981	)	$	(939,467	)	$	(345,263	)
Foreign currency translation loss		144,979			(30,348	)		(270,651	)		(46,201	)
Total comprehensive loss	$	(804,146	)	$	(161,329	)	$	(1,210,118	)	$	(391,464	)
Net loss attributable to common shareholders per share - basic	$	(0.01	)	$	(0.00	)	$	(0.01	)	$	(0.00	)
Weighted average number of shares outstanding - basic		160,820,162			147,991,502			160,418,748			146,800,000

See accompanying notes to unaudited condensed consolidated financial statements.

F-3

DOCASA, INC.

and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(unaudited)

	For the six months ended
	June 30, 2018			May 31, 2017
Cash flows from operating activities:
Net loss attributable to common shareholders	$	(939,467	)	$	(345,263	)
Adjustments to reconcile net loss before taxes and non-controlling interest to net cash provided by (used in) operations:
Depreciation and amortization expense		173,366			93,854
Loss on disposal of intangible assets		2,801
Other comprehensive income		(270,651	)		(46,201	)
Non-controlling interest gain		1,305			(653	)
Changes in operating assets and liabilities:
Accounts receivable		(238,126	)		(85,565	)
Other receivables		8,722			-
Prepaid expenses		(207,096	)		(71,702	)
Inventory		(2,063	)		(47,836	)
Other non-current receivables		-			(1,244	)
Deposits		5,201			(2,805	)
Accounts payable		570,597			134,071
Accounts payable to related parties		4,588			31,746
Accrued expenses		926,238			(39,655	)
Taxes payable		123,858			18,654
Deferred revenue		(2,981	)		12,397
Other non-current liabilities		(70,518	)		84,401
Net cash provided by (used in) operating activities		85,774			(265,801	)
Cash flows used in investing activities:
Acquisition of fixed assets		(417,065	)		(564,931	)
Cash paid for Roasted Rituals, net		(22,018	)		-
Cash paid in purchase of Tradewind		(17,527	)		-
Net cash used in investing activities		(456,610	)		(564,931	)
Cash flows from financing activities:
Proceeds from notes payable		270,497			938,036
Payment on capital leases		(161,137	)		-
Proceeds from issuance of preference shares		863,120			-
Issuance of common stock for settlement of debt		-			-
Payments on notes payable		(393,353	)		-
Net cash provided by financing activities		579,127			938,036
Net increase in cash		208,291			107,304
Cash at beginning of period		139,350			86,366
Cash at end of period	$	347,641		$	193,670

F-4

DOCASA, INC.

and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(unaudited)

	For the six months ended
	June 30, 2018		May 31, 2017
Supplemental disclosure of cash flow information:
Cash paid for interest	$	4,850	$	4,617
Cash paid for taxes	$	-	$	-
Non-cash investing and financing activities:
Issuance of preference shares for liabilities	$	111,061	$	719,934
Issuance of common shares for note payable				372,694
Fair value of shares issued for acquisition	$	1,629,049	$	-
Capital lease additions	$	58,668	$	-

See accompanying notes to unaudited condensed consolidated financial statements.

F-5

DOCASA, INC.

and Subsidiaries

Notes to Consolidated Condensed Financial Statements

June 30, 2018

(unaudited)

NOTE 1 – NATURE OF BUSINESS AND PRESENTATION

Organization

DOCASA, Inc. (the “Company,” “we,” “us,” “our,” or “DOCASA”) was incorporated in the State of Nevada on July 22, 2014, under the name of FWF Holdings, Inc. The Company changed its name on August 4, 2016. The Company was originally engaged in the business of commercial production and distribution of hot sauce (see Note 3). On August 4, 2016, the Company changed its year end from July 31 to August 31.

On July 8, 2016, the Company experienced a change in control. Atlantik LP (“Atlantik”), a related party, acquired a majority of the issued and outstanding common stock of the Company in accordance with a stock purchase agreement by and between Atlantik and Nami Shams (the “Seller”). On the closing date, July 8, 2016, pursuant to the terms of the stock purchase agreement, Atlantik purchased from the Seller 115,000,000 shares of the Company’s outstanding restricted common stock for $200,000, representing 75.8% of the Company’s outstanding common stock at that time.

On September 1, 2016, the Company acquired 99.8% of the voting stock of the Department of Coffee and Social Affairs Limited, a United Kingdom corporation (the “DEPT-UK”), and the Company agreed to issue DEPT-UK’s majority shareholder 170,000,000 shares of the Company’s common stock—110,000,000 shares initially and 60,000,000 shares at a time determined by the Company’s Board of Directors but no later than August 31, 2017, which deadline was subsequently extended to August 31, 2019. Also, on September 1, 2016, the Company acquired 115,000,000 shares of the Company’s common stock from Atlantik in exchange for issuing Atlantik a promissory note for $320,000, which shares were then cancelled, and which note has since been paid in full. As a result of the acquisition and the issuance of the initial 110,000,000 shares of common stock, and the cancellation of the 115,000,000 Atlantik shares, DEPT-UK is now the majority-owned subsidiary of the Company, and the Company experienced a change of control.

DEPT-UK formed a wholly-owned subsidiary, Department of Coffee and Internal Affairs Limited (“DCIA”), on September 11, 2014, as filed with the Registrar of Companies for England and Wales. As of June 30, 2018, DCIA has had no operations or activity.

On April 5, 2017, the Company formed Department of Coffee and Social Affairs IL, Inc. (“DEPT-IL”), an Illinois corporation.

On May 18, 2017, the Company formed Department of Coffee and Social Affairs White Space Limited (“DEPT-UKWS”), as filed with the Registrar of Companies for England and Wales. DEPT-UKWS is a subsidiary of DEPT-UK.

For financial reporting purposes, the acquisition of DEPT-UK and the change of control in connection with acquisition represented a “reverse merger” rather than a business combination, and DEPT-UK is deemed to be the accounting acquirer in the transaction. For the periods subsequent to August 31, 2016, the acquisition is being accounted for as a reverse-merger and recapitalization. DEPT-UK is the acquirer for financial reporting purposes, and the Company (DOCASA, Inc., f/k/a FWF Holdings, Inc.) is the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the acquisition are those of DEPT-UK and have been recorded at the historical cost basis of DEPT-UK, and the financial statements after completion of the acquisition include the assets and liabilities of both the Company and DEPT-UK, and the historical operations of DEPT-UK prior to closing and operations of both companies from the closing of the acquisition.

On January 2, 2018, with an effective date of November 1, 2017, DEPT-UK acquired Tapped and Packed Ltd (“Tapped”), an UK company, for a combination of cash and shares of common stock of the Company. See Note 2. Tapped became a subsidiary of DEPT-UK as a result of the transaction. Tapped has four shop locations in the UK which serve coffee and food.

On February 23, 2018, the Board of Directors determined to change the Company’s fiscal year end to December 31 from August 31. The Company believes this change will benefit the Company by aligning its reporting periods to be more consistent with peer coffee companies.

On May 23, 2018, DEPT-UK acquired Bea’s of Bloomsbury Limited (“Bea’s”), an UK company, for shares of common stock of the Company. See Note 2. Bea’s became a subsidiary of DEPT-UK as a result of the transaction. Bea’s has five shop locations in the UK which serves coffee and food.

On June 29, 2018, DEPT-UK acquired Tradewind Espresso Ltd (“Tradewind”), an UK company, for cash. See Note 2. Tradewind became a subsidiary of DEPT-UK as a result of the transaction. Tradewind has one shop location in the UK which serves coffee and food.

On June 29, 2018, DEPT-UK acquired Roasted Rituals Coffee Ltd (“Roasted Rituals”), an UK company, for cash. See Note 2. Roasted Rituals became a subsidiary of DEPT-UK as a result of the transaction. Roasted Rituals is a specialty coffee roaster and has one location in the UK.

F-6

Nature of Operations

We are in the specialty coffee industry, specifically with company-operated stores. The Company will generate revenue through sales at nineteen existing company-operated coffee shop locations in the UK, with seven more locations under construction. Similar to other leading operators, we sell our proprietary coffee and related products, and complementary food and snacks.

Principles of Consolidation

The consolidated financial statements include the accounts of DOCASA and its subsidiaries, DEPT-UK, DCIA, DEPT-IL and DEPT-UK’s subsidiaries, Tapped, Bea’s, Roasted Rituals, Tradewind, and DEPT-UKWS. All significant inter-company balances and transactions have been eliminated in consolidation.

Basis of Presentation

The accompanying unaudited consolidated condensed financial statements of DOCASA have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and done under §240.13(a) of the Securities Act. The results of operations for the interim period ended June 30, 2018 shown in this report are not necessarily indicative of results to be expected for the full fiscal year ending December 31, 2018. In the opinion of the Company’s management, the information contained herein reflects all adjustments (consisting of normal recurring adjustments, unless otherwise indicated) necessary for a fair presentation of the Company’s results of operations, financial position and cash flows. The unaudited interim financial statements should be read in conjunction with the audited financial statements in the Company’s Form 10-K for the year ended August 31, 2017, filed on December 18, 2017 and Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities 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. Actual results could differ from those estimates. Significant estimates in the accompanying financial statements include the amortization period for intangible assets, valuation and impairment valuation of intangible assets, allowance for accounts receivable, estimated lives of intangible and fixed assets, and valuation of share-based payments.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Accounts Receivable

Accounts receivable consisted of amounts due from customers primarily for management fees. The Company considered accounts more than 30 days old to be past due. The Company used the allowance method for recognizing bad debts. When an account was deemed uncollectible, it was written off against the allowance. The Company generally does not require collateral for its accounts receivable. Management has not recorded an allowance for doubtful accounts as of June 30, 2018 or December 31, 2017.

Inventory

Inventory is recorded at the lower of cost or market and the cost of sales are recorded utilizing the first in first out (“FIFO”) method.

Fixed Assets

Property and equipment are recorded at cost. Depreciation is computed using the straight-line method based on the estimated useful lives of the related assets of three years for computer equipment, five years for office furniture and fixtures, and the lesser of the lease term or the useful life of the leased equipment. Leasehold improvements are amortized over the lesser of the lease term or the useful life of the improvements. Expenditures for maintenance and repairs along with fixed assets below our capitalization threshold are expensed as incurred.

Impairment of Long-Lived Assets

The Company accounts for long-lived assets in accordance with the provisions of Statement of Financial Accounting Standards ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets.” This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

F-7

Fair Value of Financial Instruments

The Company measures its financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our financial instruments, including cash, accounts receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short maturities.

We follow accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

Revenue Recognition

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This update provides a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. We have adopted this update. We do not believe this guidance will impact the recognition of our primary source of revenue from company-owned coffee shops. The adoption of this guidance did not have a material impact on our consolidated financial statements.

Stock-Based Compensation

The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company accounts for non-employee share-based awards in accordance with the measurement and recognition provisions ASC Topic 505-50. The Company estimates the fair value of stock options at the grant date by using the Black-Scholes option-pricing model.

Advertising

Advertising is expensed as incurred and is included in other general and administrative expenses on the accompanying condensed consolidated statement of operations. For the six months ended June 30, 2018 and May 31, 2017 advertising expense was $8,068 and $23,171, respectively.

Income Taxes

The Company adopted the provisions of ASC 740, “Income Taxes.” When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying condensed consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of June 30, 2018, tax years 2014 - 2017 remain open for IRS audit and tax years 2015–2017 remain open for HM Revenue & Customs (“HMRC”) audit. The Company has received no notice of audit from the IRS or HMRC for any of the open tax years.

Net Earnings (Loss) Per Share

In accordance with ASC 260-10, “Earnings Per Share,” basic net earnings (loss) per common share is computed by dividing the net earnings (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted average number of common stock shares outstanding during the period. The Company does not currently have any potential dilutive securities outstanding as of June 30, 2018 and May 31, 2017.

F-8

Foreign Currency Translation and Transactions

The British Pound (“£”) is the functional currency of DEPT-UK and Tapped whereas the financial statements are reported in United States Dollar (“USD,” “$”). Assets and liabilities are translated based on the exchange rates at the condensed consolidated balance sheet date, while revenue and expense accounts are translated at the average exchange rates prevailing during the period. Equity accounts are translated at historical exchange rates. The resulting translation gain and loss adjustments are accumulated as a component of stockholders’ equity and other comprehensive loss.

Comprehensive Loss

The Company reports comprehensive loss and its components in its consolidated financial statements. Comprehensive loss consists of net loss on foreign currency translation adjustments affecting stockholders’ equity that, under U.S. GAAP, are excluded from net loss. As of June 30, 2018, the exchange rate between U.S. Dollars and British Pounds was US$1.32 = £1.00, and the weighted average exchange rate for the six months ended June 30, 2018 was US$1.34 = £1.00. As of December 31, 2017, the exchange rate between U.S. Dollars and British Pounds was US$1.35 = £1.00.

Going Concern

The Company had net loss attributable to common shareholders for the six months ended June 30, 2018 of $939,467 and a working capital deficit as of June 30, 2018 of $2,047,845, and has cash provided by operations of $85,774 for the six months ended June 30, 2018. In addition, as of June 30, 2018, the Company had a stockholders’ deficit and accumulated deficit of $1,399,902 and $3,422,375, respectively. Without further funding, these conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The ability of the Company to continue its operations is dependent on the execution of management’s plans, which include the raising of capital through the debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working capital requirements. If the Company were not to continue as a going concern, it would likely not be able to realize its assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of the financial statements.

There can be no assurances that the Company will be successful in generating additional cash from the equity/debt markets or other sources to be used for operations. The financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary. Based on the Company’s current resources, the Company will not be able to continue to operate without additional immediate funding. Should the Company not be successful in obtaining the necessary financing to fund its operations, the Company would need to curtail certain or all operational activities and/or contemplate the sale of its assets, if necessary.

Effect of Recent Accounting Pronouncements

The Company reviews new accounting standards and updates as issued. No new standards or updates had any material effect on these financial statements. The accounting pronouncements and updates issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these financial statements. Management does believe that some of the subsequent pronouncements will have a material effect on these financial statements as presented and does not anticipate the need for any future restatement of these financial statements because of the retro-active application of any accounting pronouncements issued subsequent to June 30, 2018 through the date these financial statements were issued.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued an ASU on lease accounting. The ASU requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to be recognized as assets and liabilities on the balance sheet. The ASU is effective for reporting periods beginning after December 15, 2018 with early adoption permitted. While the Company is still evaluating the ASU, the Company expects the adoption of the ASU to have a material effect on the Company’s financial condition due to the recognition of the lease rights and obligations as assets and liabilities. The Company expects the ASU to have a material effect on the Company’s results of operations and financial position, and the ASU will have no effect on cash flows.

ASU 2014-09, Revenue – Revenue from Contracts with Customers. In May 2014, the FASB issued a new accounting standard that requires recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. The FASB has also issued several updates to ASU 2014-09. The new standard supersedes U.S. GAAP guidance on revenue recognition and requires the use of more estimates and judgments than the present standards. It also requires additional disclosures. We adopted the new revenue guidance effective January 1, 2017, by recognizing the cumulative effect of initially applying the new standard as an increase to the opening balance of retained earnings. The effect of the adoption was immaterial, with an immaterial impact to our net income on an ongoing basis. Adoption of the new standard will also result in changes in classification between Revenues and Direct costs of revenue.

F-9

NOTE 2 – ACQUISITIONS

Acquisition of Tapped and Packed Ltd

On November 1, 2017, DEPT-UK entered into an acquisition agreement (the “Tapped Acquisition Agreement”) with Tapped, a United Kingdom corporation. Richard Lilley, an individual (“Lilley”), was the owner of record of 100 capital shares of Tapped. Pursuant to the Tapped Acquisition Agreement, Tapped stock was transferred to DEPT-UK on November 1, 2017, in consideration of £175,000 and 1,546,875 shares of common stock of the Company. The £175,000 was paid in October 2017 as a prepayment to the completion date of November 1, 2017. Stefan Allesch-Taylor (“Allesch-Taylor”), Chairman of the Company, utilized his personally owned shares of common stock of the Company, and assigned the 1,546,875 shares (the “Allesch-Taylor Shares”) from his ownership to Lilley. In exchange for the use of the Allesch-Taylor Shares, which were provisionally valued at $1,918,125 (“Provisional Share Compensation Value”), the Board of Directors issued Allesch-Taylor 1,325,000 Preference Shares of DEPT-UK. The Provisional Share Compensation Value was determined by the previous day’s closing price of $1.24 per share. The Company’s common stock is thinly-traded and an insignificant amount of stock traded has historically caused significant fluctuations in the price per share of the Company’s common stock. The Company will utilize an independent third-party business valuation to determine the value of Tapped, as well as get an independent valuation of the Company’s common stock as of the date of the transaction. Management believes that the separate valuations will determine a fair and reasonable valuation thereby reducing the provisional goodwill recorded, as of June 30, 2018, of $2,185,012. The Allesch-Taylor Shares of common stock were assigned to Lilley on or about October 19, 2017 and were released in accordance to the agreement. See Notes 1, 7 and 8. Also in connection with the Tapped Acquisition Agreement, Gill and Lopez were appointed to serve on Tapped’s Board of Directors.

The following table summarizes the consideration given for DEPT-UK and the provisional fair values of the assets and liabilities assumed at the acquisition date.

Consideration given:
Cash given	$	237,877
Common stock shares given		1,918,125
Total consideration given	$	2,156,002
Fair value of identifiable assets acquired, and liabilities assumed:
Cash	$	200,582
Prepaid expense		92,052
Inventory		51,411
Fixed assets, net		73,337
Deposits		119,999
Accrued expenses		(195,621	)
Short-term note payable		(200,804	)
Director note		(168,782	)
Deferred taxes		(1,184	)
Total identifiable net liabilities		(29,010	)
Goodwill		2,185,012
Total consideration	$	2,156,002

The revenue and net loss for Tapped, as reflected in the unaudited condensed consolidated statement of operations, for the six months ended June 30, 2018, to reflect the current period, was $1,056,081 and $56,725, respectively.

F-10

Acquisition of Bea’s of Bloomsbury Limited

On May 23, 2018, DEPT-UK entered into an acquisition agreement (the “Bea’s Acquisition Agreement”) with Bea’s, a United Kingdom corporation. Pursuant to the Bea’s Acquisition Agreement, Bea’s stock was transferred to DEPT-UK on May 23, 2018, in consideration of 1,933,239 shares of common stock of the Company. As of the date of this report, the shares have not been issued to the owners of Bea’s and are recorded as issuable as of June 30, 2018, as approved by the Board of Directors of the Company. The Company’s common stock was valued at $0.84 therefore the Company recorded the value of $1,623,921. Management recorded a provisional goodwill, as of June 30, 2018, of $1,698,321, which is attributable to common synergies, the workforce, and may be adjusted based on management’s final determination of the fair value of the assets and liabilities acquired. See Notes 1, 7 and 8.

The following table summarizes the consideration given by DEPT-UK and the provisional fair values of the assets and liabilities assumed at the acquisition date.

Consideration given:
Common stock shares given	$	1,623,921
Total consideration given	$	1,623,921
Fair value of identifiable assets acquired, and liabilities assumed:
Prepaid expense	$	86,764
Inventory		36,311
Fixed assets, net		315,558
Deposits		54,357
Accounts payable		(250,365	)
Accrued expenses		(271,096	)
Short-term note payable		(45,931	)
Total identifiable net liabilities		(74,400	)
Goodwill		1,698,321
Total consideration	$	1,623,921

The revenue and loss for Bea’s, as reflected in the unaudited condensed consolidated statement of operations, for the six months ended June 30, 2018, to reflect the current period, was $166,201 and $31,562, respectively, and for the six months ended May 31, 2017, the historical financial statements are unavailable.

Acquisition of Roasted Rituals Coffee Ltd

On June 29, 2018, DEPT-UK entered into an acquisition agreement (the “Roasted Rituals Acquisition Agreement”) with Roasted Rituals, a United Kingdom corporation. Pursuant to the Roasted Rituals Acquisition Agreement, Roasted Rituals’ stock was transferred to DEPT-UK on June 29, 2018, in consideration of £175,000. The £175,000 is to be paid in tranches; £37,500 at closing, £62,500 on the first anniversary of the closing date, and £75,000 on the second anniversary of the closing date. The Company has recorded the liabilities as short-term and long-term, respectively. Management has calculated provisional goodwill of $181,593, which is attributable to common synergies, the workforce, and may be adjusted based on management’s final determination of the fair value of the assets and liabilities acquired. See Note 1 and 7.

F-11

The following table summarizes the consideration given for DEPT-UK and the provisional fair values of the assets and liabilities assumed at the acquisition date.

Consideration given:
Cash given	$	49,096
Accrued consideration		180,020
Total consideration given	$	229,116
Fair value of identifiable assets acquired, and liabilities assumed:
Cash	$	27,078
Accounts receivable, net		11,350
Fixed assets, net		11,344
Accrued expenses		(2,249	)
Total identifiable net assets		47,523
Goodwill		181,593
Total consideration	$	229,116

The revenue and loss for Roasted Rituals, as reflected in the unaudited condensed consolidated statement of operations, for the six months ended June 30, 2018, to reflect the current period, was $0 and $1,171, respectively, and for the six months ended May 31, 2017, the financial statements are unavailable.

Acquisition of Tradewind Espresso Ltd

On June 29, 2018, DEPT-UK entered into an acquisition agreement (the “Roasted Rituals Acquisition Agreement”) with Roasted Rituals, a United Kingdom corporation. Pursuant to the Roasted Rituals Acquisition Agreement, Roasted Rituals’ stock was transferred to DEPT-UK on June 29, 2018, in consideration of £175,000. The £175,000 is to be paid in tranches; £37,500 at closing, £62,500 on the first anniversary of the closing date, and £75,000 on the second anniversary of the closing date. The Company has recorded the liabilities as short-term and long-term, respectively. Management has calculated provisional goodwill of $197,565, which is attributable to common synergies, the workforce, and may be adjusted based on management’s final determination of the fair value of the assets and liabilities acquired. See Note 1 and 7.

The following table summarizes the consideration given by DEPT-UK and the provisional fair values of the assets and liabilities assumed at the acquisition date.

Consideration given:
Cash given	$	49,096
Accrued consideration		180,020
Total consideration given	$	229,116
Fair value of identifiable assets acquired, and liabilities assumed:
Cash	$	31,569
Accounts receivable, net		473
Fixed assets, net		13,308
Accrued expenses		(13,799	)
Total identifiable net assets		31,551
Goodwill		197,565
Total consideration	$	229,116

The revenue and loss for Tradewinds, as reflected in the unaudited condensed consolidated statement of operations, for the six months ended June 30, 2018, to reflect the current period, was $0 and $3,226, respectively, and for the six months ended May 31, 2017, the financial statements were unavailable.

Pro-Forma Financial Information

The following unaudited pro-forma data summarizes the result of the operations for the six months ended June 30, 2018 and May 31, 2017, as if the acquisition of Bea’s, Roasted Rituals and Tradewind had been completed on September 1, 2016, which was the beginning of the Company’s previous adjusted fiscal year (for comparison purposes) prior to the change to a calendar year end in March 2018. The pro-forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place on September 1, 2016.

	For the Six Months Ended June 30, 2018
										Roasted						Pro-forma
	DOCASA			Tapped			Bea’s			Rituals			Tradewind			Adjustments		Combined
Revenue, net	$	2,692,461		$	1,056,081		$	1,022,579		$	63,790		$	186,961		$	-	$	5,021,873
Operating expenses		4,642,058			1,112,806			1,223,736			66,380			204,933			-		7,249,913
Loss from operations		(1,949,597	)		(56,725	)		(201,156	)		(2,590	)		(17,972	)		-		(2,228,040	)
Other income (expense)		(11,297	)		-			-			-			-			-		(11,297	)
Loss before income taxes		(1,960,894	)		(56,725	)		(201,156	)		(2,590	)		(17,972	)		-		(2,239,337	)
Net Loss attributable to common shareholders	$	(1,960,894	)	$	(56,725	)	$	(201,156	)	$	(2,590	)	$	(17,972	)	$	-	$	(2,239,337	)
Net income (loss) per common share - basic	$	(0.01	)															$	(0.01	)
Weighted average number of common shares outstanding during the period - basic		151,143,287																	151,143,287

F-12

	For the Six Months Ended May 31, 2017
	DOCASA			Tapped		Bea’s (a)		Roasted Rituals		Tradewind			Pro-forma Adjustments		Combined
Revenue, net	$	1,100,939		$	983,110	$	-	$	81,233	$	186,420		$	-	$	2,351,702
Operating expenses		1,722,031			696,770		-		55,559		195,201			-		2,669,561
Income (loss) from operations		(621,092	)		286,340		-		25,674		(8,781	)		-		(317,859	)
Other income (expense)		(9,858	)		-		-		-		-			-		(9,858	)
Income (loss) before income taxes		(630,950	)		286,340		-		25,674		(8,781	)		-		(327,717	)
Net income (loss) attributable to common shareholders	$	(630,950	)	$	286,340	$	-	$	25,674	$	(8,781	)	$	-	$	(327,717	)
Net loss per common share - basic	$	(0.00	)												$	(0.00	)
Weighted average number of common shares outstanding during the period - basic		146,800,000														146,800,000

(a) Historical financial statements unavailable.

NOTE 3 – INVENTORY

The Company has inventory of various items used for the sale of coffee and complementary products. As of June 30, 2018, and December 31, 2017, the Company had inventory of $138,760 and $100,386, respectively. The Company accounts for its inventory using the lower of cost or market and the cost of sales are recorded utilizing the first in first out (“FIFO”) method.

The inventory is as follows:

	June 30, 2018		December 31, 2017
Consumable products	$	37,402	$	37,750
Cold brew		12,761		7,119
Retail products		36,820		18,725
Food and drinks		51,777		36,792
Total inventory	$	138,760	$	100,386

NOTE 4 – FIXED ASSETS

The Company has fixed assets including computer equipment, office equipment, site equipment and machinery, site fit out costs, site furniture, fixtures and fittings.

The depreciation expense for the six months ended June 30, 2018 and May 31, 2017, was $170,565 and $90,330, respectively. The variance between the expense and the increase in accumulated depreciation is due to timing of the currency translation calculation.

NOTE 5 – INTANGIBLE ASSETS

Website Development

The Company has intangible assets related to website development. The amortization of the intangible assets is over a three-year period.

The amortization expense for the six months ended June 30, 2018 and May 31, 2017, was $2,801 and $3,524, respectively. The variance between the expense and the increase in accumulated amortization is due to timing of the currency translation calculation.

Goodwill

The Company has goodwill related to the acquisitions of Tapped, Bea’s, Tradewind and Roasted Rituals. The Company has not determined the deductibility of goodwill for tax purposes. As of June 30, 2018, the Company has $4,262,492 of goodwill, as allocated below:

Balance, December 31, 2017	$	2,185,012
Acquisitions		2,077,480
Balance, June 30, 2018	$	4,262,492

NOTE 6 – NOTES PAYABLE

The Company has notes payable as of June 30, 2018 and December 31, 2017, are as follows:

Notes payable - current

	June 30, 2018						December 31, 2017
			Accrued						Accrued
	Principal		Interest		Total		Principal		Interest		Total
Arch Investments	$	2,194	$	-	$	2,194	$	2,194	$	-	$	2,194
Arch Investments		5,067		-		5,067		5,067		-		5,067
Arch Investments		5,065		-		5,065		5,065		-		5,065
Arch Investments		15,873		-		15,873		15,873		-		15,873
Arch Investments		4,349		-		4,349		4,349		-		4,349
HSBC		109,536		-		109,536		111,970		-		111,970
HSBC		27,251		-		27,251		26,642		-		26,642
Total	$	169,335	$	-	$	169,335	$	171,160	$	-	$	171,160

Notes payable - non-current

	June 30, 2018						December 31, 2017
			Accrued						Accrued
	Principal		Interest		Total		Principal		Interest		Total
Deij Capital Limited (1)	$	11,164	$	-	$	11,164	$	11,414	$	-	$	11,414
HSBC		219,072		-		219,072		280,011		-		280,011
HSBC		51,759		-		51,759		65,670		-		65,670
Total	$	281,995	$	-	$	281,995	$	357,095	$	-	$	357,095

(1) Related party

F-13

On July 1, 2014, DEPT-UK entered into a business loan with Deij Capital Limited (“Deij Capital”), a related party in which Gill is the director and owner. The loan is for 3 years, with an interest rate of 0%. The note was extended to July 1, 2018. The imputed interest is deemed immaterial as of June 30, 2018. The facility loan was for $171,437 (£100,000) to be drawn down as and when required. On June 30, 2016, Deij Capital converted the balance due of $179,534 (£135,464) into 135,464 shares of Preference Shares. On May 31, 2017, Deij Capital converted of the balance due $63,990 (£51,500) into 51,500 shares of Preference Shares. The outstanding principal as of June 30, 2018 and December 31, 2017 was $11,164 (£8,454) and $11,414 (£8,454), respectively. The accrued interest as of June 30, 2018 and December 31, 2017, was $0 (£0) and $0 (£0), respectively.

On July 31, 2014, DOCASA executed a promissory note for $2,194 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. The imputed interest is deemed immaterial as of June 30, 2018. As of June 30, 2018, and December 31, 2017, the principal was $2,194. This note was acquired by Arch Investments, LLC.

On April 30, 2015, DOCASA executed a promissory note for $5,067 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. On July 20, 2016, Arch Investments, LLC acquired this promissory note due to Nami Shams. The imputed interest is deemed immaterial as of June 30, 2018. As of June 30, 2018, and December 31, 2017, the principal was $5,067.

On July 31, 2015, DOCASA executed a promissory note for $5,065 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. The imputed interest is deemed immaterial as of June 30, 2018. As of June 30, 2018, and December 31, 2017, the principal was $5,065. This note was acquired by Arch Investments, LLC.

On October 31, 2015, DOCASA executed a promissory note for $15,873 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. The imputed interest is deemed immaterial as of June 30, 2018. As of June 30, 2018, and December 31, 2017, the principal was $15,873. This note was acquired by Arch Investments, LLC.

On January 31, 2016, DOCASA executed a promissory note for $4,349 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. The imputed interest is deemed immaterial as of June 30, 2018. As of June 30, 2018, and December 31, 2017, the principal was $4,349. This note was acquired by Arch Investments, LLC.

On July 28, 2016, DEPT-UK entered into a business loan with HSBC. The loan is a development loan drawn down against development invoices. The loan is for four years, with an interest rate of 4.5% over the Bank of England base rate. The loan repayment is monthly, interest-only payments for the first six months followed by monthly repayments of principal and interest over the remaining forty-two months. The loan was for $437,992 (£352,500) with an initial $115,767 (£93,178) drawn. The outstanding principal and accrued interest as of June 30, 2018, and December 31, 2017, was $328,608 (£248,824) and $391,981 (£290,294), respectively. As of June 30, 2018, the current portion was $109,536 and the non-current portion was $219,072.

On September 8, 2016, Tapped, prior to being acquired by DEPT-UK, entered into a business loan with HSBC. The loan is for five years, with an interest rate of 5.51%. The loan was for £90,000. The outstanding principal as of June 30, 2018, and December 31, 2017, was $79,010 and $92,312, respectively. As of June 30, 2018, the current portion was $27,251 and the non-current portion was $51,759.

NOTE 7 – RELATED PARTIES TRANSACTIONS

For the six months ended June 30, 2018 and May 31, 2017, the Company purchased £59,331 and £88,389, respectively, of cakes from Dee Light, a company which Gill, the vice chairman of the Company, was a 50% shareholder (until November 2016). As of June 30, 2018, and December 31, 2017, the Company owed Dee Light £50,484 and £63,833, respectively.

For the six months ended June 30, 2018 and May 31, 2017, the Company made sales or advances of £246,414 and £202,676, respectively, to The Roastery Department Ltd. (“The Roastery Department”) and made purchases from it of £202,596 and £118,135 for the six months ended June 30, 2018 and May 31, 2017, respectively. As of June 30, 2018, and December 31, 2017, the Company both has receivables and payables from The Roastery Department, which netted as receivables of $479,412 (£363,013) and $421,353 (£312,113), respectively. Gill, the Company’s vice chairman, and Ashley Lopez (“Lopez”), the Company’s chief executive officer, were both unpaid directors of The Roastery Department until they resigned on December 1, 2016. The Company, when purchasing products from The Roastery Department, was provided a discount due to the strategic relationship between the two parties which provided the Company its purchases at cost.

F-14

As of June 30, 2018, and December 31, 2017, the Company owed Allesch-Taylor, the Company’s chairman, payables of $54,416 (£41,204) and $36,729 (£29,383), respectively.

As of June 30, 2018, and December 31, 2017, the Company owed Lopez, the Company’s chief executive officer, payables of $878 (£665) and $14,613 (£11,690), respectively.

As of June 30, 2018, and December 31, 2017, the Company owed Deij Capital, a company in which Gill, the deputy chairman of the Company, is the director and owner, notes payable of $11,164 (£8,454) and $11,414 (£8,454), respectively.

The Company has an employment agreement with Lopez, our CEO, and did have a consulting agreement with Clearbrook Capital Partners LLP (“Clearbrook”), an entity where Kazi Shahid, our former CFO, was a partner and also served as CFO. Allesch-Taylor is a director of Clearbrook. The agreement with Clearbrook was terminated on March 15, 2017.

The above related party transactions are not considered as arm’s length transactions for all circumstances.

NOTE 8 – STOCKHOLDERS’ EQUITY

Common Stock

The Company is authorized to issue up to 250,000,000 shares of common stock. Each outstanding share of common stock entitles the holder to one vote per share on all matters submitted to a stockholder vote. All shares of common stock are non-assessable and non-cumulative, with no pre-emptive rights.

On May 23, 2018, the Company issued 1,932,239 shares of common stock to various third parties as compensation for the acquisition of Bea’s (see Notes 1 and 2). As of June 30, 2018, these shares had not been issued.

As of June 30, 2018, the Company has not granted any stock options and has not recorded any stock-based compensation.

Preference Shares and Non-Controlling Interest

The Articles of Association of DEPT-UK, pursuant to the Companies Act 2006, authorized DEPT-UK to issue up to 25,000,000 preference shares, par value £1.00 per share (such subsidiary preference shares referred to herein as “Preference Shares”). Such Preference Shares have no votes and limited distribution rights. Subject to the provisions of the Companies Act 2006, DEPT-UK shall have the right pursuant to Section 687-688 of the Companies Act 2006 to redeem at par the whole or any part of the Preference Shares at any time or times after the date of issue of the said Preference Shares upon giving to DEPT-UK not less than three months’ previous notice in writing. The Preference Shares, at the discretion of the Board of Director of DEPT-UK, can be purchased at the value they were issued or can be converted into contributed capital. The Preference Shares are accounted for as non-controlling interest. As of June 30, 2018, and December 31, 2017, 4,319,641 and 3,557,796 shares were outstanding, respectively. Of the outstanding shares, 1,603,460 and 1,666,709 were issued to related parties, as of June 30, 2018, and December 31, 2017, respectively.

DEPT-UK has a non-controlling interest of 0.2%. For the six months ended June 30, 2018, the Company had a non-controlling interest of $1,305. For the six months ended May 31, 2017, the Company had a non-controlling interest of $653.

On February 28, 2017, 51,500 Preference Shares were issued to Deij Capital in exchange for a debt of $63,990 (£51,500). See Note 7.

On December 5, 2017, Borough Capital contributed $25,000 (£18,583) to DEPT-UK, in exchange for 18,583 Preference Shares.

On December 14, 2017, Borough Capital contributed $45,000 (£33,488) to the DEPT-UK, in exchange for 33,488 Preference Shares.

On January 17, 2018, Borough Capital, in regards to an October 2017 contribution of $111,061 to DEPT-UK, converted the liability into 79,563 Preference Shares.

During the three months ended June 30, 2018, 682,282 Preference Shares were issued for contributions of $863,120 to DEPT-UK.

Acquisition of Tapped and Packed Ltd

On November 1, 2017, DEPT-UK entered into the Tapped Acquisition Agreement with Tapped, a United Kingdom corporation. See Note 2.

F-15

The dollar amount of Preference Shares, as recorded, were recorded to non-controlling interest as part of consolidation.

NOTE 9 – COMMITMENTS AND CONTINGENCIES

Legal Matters

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of August 24, 2018, there were no pending or threatened lawsuits.

Lease Commitment

We lease office space in Schaumburg, Illinois, pursuant to a lease that is monthly. This facility serves as our corporate office.

Future minimum lease payments under leases with the various subsidiaries, are as follows:

2018	$	387,567
2019		775,490
2020		778,760
2021		746,502
2022		532,555
Future		1,241,852
Total	$	4,462,726

Note: The above table will change in each future filing due to currency translation as applicable.

DEPT-UK has 18 leases, of which one is for the UK administrative office, and 17 operational leases. The Company has two leases in the United States for DEPT-IL. Various leases have break out dates prior to expiration.

The Company is a primary leaseholder on one lease which it has subleased to the Roastery and is responsible for the monthly payments which approximate £221.

Rent expense for the six months ended June 30, 2018 and May 31, 2017, was $588,477 and $233,373, respectively.

NOTE 10 – CONCENTRATIONS

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to a concentration of credit risk, consist principally of temporary cash investments.

The Company places its temporary cash investments with financial institutions insured by the Federal Deposit Insurance Corporation (“FDIC”) for the United States and the Financial Services Compensation Scheme (“FSCS”) for the United Kingdom. No amounts exceeded federally insured limits as of June 30, 2018. There have been no losses in these accounts through June 30, 2018.

Concentration of Customer

The Company has one customer, which, for the six months ended June 30, 2018 and May 31, 2017, had sales of $444,833 (£333,191, 11.4% of total revenue) and $349,798 (£274,432, 16.8% of total revenue), respectively. The Company has a contract with the customer that expires in February 2020.

NOTE 11 – REVENUE CLASSES

Selected financial information for the Company’s operating revenue classes are as follows:

	For the six months ended				For the six months ended
	June 30, 2018				May 31, 2017
Revenues:
Coffee and complementary food products	$	3,538,442	£	2,651,111	$	1,826,925	£	1,459,928
Coffee school		6,786		5,083		6,906		5,520
Management fees		369,515		276,776		250,218		199,946
Total	$	3,914,743	£	2,932,970	$	2,084,049	£	1,665,394

F-16

	For the six months ended				For the six months ended
	June 30, 2018				May 31, 2017
Direct costs of revenue:
Coffee and complementary food products	$	2,819,984	£	2,116,349	$	1,554,987	£	1,223,067
Coffee school		6,108		4,575		5,558		4,429
Management fees		113,035		84,666		58,529		46,138
Total	$	2,939,127	£	2,205,590	$	1,619,074	£	1,273,634

The acquisition of Tapped, effective November 1, 2017, is reflective in 2018 for the six months. The acquisition of Bea’s, Tradewind and Roasted Ritual in May 2018, June 2018 and June 2018, respectively, are not significant.

NOTE 12 – CAPITAL LEASE OBLIGATIONS

The Company leases various assets under capital lease. As of June 30, 2018, and December 31, 2017, capital lease obligations consisted of the following:

	June 30, 2018		December 31, 2017
Computer equipment	$	66,429	$	66,429
Office equipment		45,276		23,609
Site equipment and machinery		492,547		457,134
Site fit out costs		1,799,750		1,799,750
Site furniture, fixtures and fittings		468,037		268,796
Total fixed assets		2,872,039		2,615,718
Less: Accumulated depreciation		1,155,123		858,322
Fixed assets, net	$	1,716,916	$	1,757,396

Aggregate future minimum rentals under capital leases are as follows:

2018	$	94,568
2019		168,035
2020		135,040
2021		86,622
2022		13,875
Future		2,753
Total		500,893
Less: Interest		23,142
Present value of minimum lease payments		477,751
Less: Current portion of capital lease obligations		172,348
Capital lease obligations, net of current portion	$	305,403

Note: The above schedule reflects only items that have payments associated with them.

NOTE 13 – SUBSEQUENT EVENTS

Management has reviewed and evaluated subsequent events through the date on which the current financial statements were available to be issued and did not have any material recognizable subsequent events after June 30, 2018.

F-17

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

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

We believe that it is important to communicate our future expectations to our security holders and to the public. This report, therefore, contains statements about future events and expectations which are “forward-looking statements” within the meaning of Sections 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934, including the statements about our plans, objectives, expectations and prospects under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You can expect to identify these statements by forward-looking words such as “may,” “might,” “could,” “would,” “will,” “anticipate,” “believe,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek” and other similar expressions. Any statement contained in this report that is not a statement of historical fact may be deemed to be a forward-looking statement. Although we believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations and prospects will be achieved.

Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk Factors” section of and elsewhere in our Annual Report on Form 8-K for the fiscal year ended August 31, 2016 and in our subsequent filings with the Securities and Exchange Commission. The following discussion of our results of operations should be read together with our financial statements and related notes included elsewhere in this report.

Company Overview

The Company was a startup company that was incorporated in Nevada on July 22, 2014 and established a fiscal year end of July 31. On August 4, 2016, the Company filed with the State of Nevada to change its fiscal year to August 31.

On July 8, 2016, the Company experienced a change in control. Atlantik LP (“Atlantik”) acquired a majority of the issued and outstanding common stock of the Company in accordance with a stock purchase agreement by and between Atlantik and Nami Shams (the “Seller”). On the closing date, July 8, 2016, pursuant to the terms of the stock purchase agreement, Atlantik purchased from the Seller 115,000,000 shares of the Company’s outstanding restricted common stock for $200,000, representing 75.8% of the Company’s outstanding common stock at that time.

On September 1, 2016, the Company acquired 99.8% of the voting stock of the Department of Coffee and Social Affairs Limited, a United Kingdom corporation (the “DEPT-UK”), and the Company agreed to issue DEPT-UK’s majority shareholder 170,000,000 shares of the Company’s common stock—110,000,000 shares initially and 60,000,000 shares at a time determined by the Company’s Board of Directors but no later than August 31, 2017, which deadline was subsequently extended to August 31, 2019. Also, on September 1, 2016, the Company acquired 115,000,000 shares of the Company’s common stock from Atlantik in exchange for issuing Atlantik a promissory note for $320,000, which shares were then cancelled, and which note has since been paid in full. As a result of the acquisition and the issuance of the initial 110,000,000 shares of common stock, and the cancellation of the 115,000,000 Atlantik shares, DEPT-UK is now the majority-owned subsidiary of the Company, and the Company experienced a change of control.

Prior to the acquisition, we were a company that was originally engaged in the business of commercial production and distribution of hot sauce.

On January 2, 2018, with an effective date of November 1, 2017, DEPT-UK acquired Tapped and Packed Ltd (“Tapped”), an UK coffee shop company with four locations.

On May 23, 2018, DEPT-UK acquired Bea’s of Bloomsbury Limited (“Bea’s”), an UK company with five shop locations in the UK which serves coffee and food.

On June 29, 2018, DEPT-UK acquired Tradewind Espresso Ltd (“Tradewind”), an UK company with one shop location in the UK which serve coffee and food.

On June 29, 2018, DEPT-UK acquired Roasted Rituals Coffee Ltd (“Roasted Rituals”), an UK company which is a specialty coffee roaster and has one shop location in the UK.

We are currently devoting substantially all of our efforts as an artisan coffee company that serves premium single origin coffee to the United Kingdom’s discerning coffee drinkers as well as a selection of quality foods. In October 2017 and August 2018, we opened our first and second, respectively, coffee shop in the United States, in Chicago, Illinois.

The following Management Discussion and Analysis should be read in conjunction with the financial statements and accompanying notes included in this Form 10-Q.

3

Results of Operations

For the Three Months Ended June 30, 2018 and May 31, 2017

Revenue

For the three months ended June 30, 2018, the Company had $2,091,034 of revenue, compared to $1,163,202 for the three months ended May 31, 2017. Revenue in U.S. Dollars increased by 79.8%, as a result of multiple new coffee shop locations being in service during the three months ended June 30, 2018, as well as the effect of the acquisitions of Tapped, Bea’s, Roasted Rituals and Tradewind, as compared to the three months ended May 31, 2017. In the three months ended June 30, 2018, the Company had 28 coffee shop locations in operation, with four of the shops being acquired in the acquisition of Tapped, five of the shops being acquired in the acquisition of Bea’s, and one shop each in the acquisitions of Tradewind and Roasted Rituals. The revenues for Bea’s was $166,201, which was for approximately 40 days. Tradewind and Roasted Rituals was immaterial as the acquisitions were completed late in the quarter. Coffee shops opened in the prior year performed within management’s expectations for the three months ended June 30, 2018. Company revenues, by revenue class, are as follows:

	For the three months ended				For the three months ended
	June 30, 2018				May 31, 2017
Revenues:
Coffee and complementary food products	$	1,899,407	£	1,437,011	$	1,009,825	£	806,717
Coffee school		3,555		2,690		1,430		1,142
Management fees		188,072		142,374		151,947		121,386
Total	$	2,091,034	£	1,582,075	$	1,163,202	£	929,245

Operating Expenses

Direct costs of Revenue

For the three months ended June 30, 2018, direct costs of revenue were $1,792,407 compared to $903,293 for the three months ended May 31, 2017. Direct costs of revenue reflect an increase of $889,114, or 98.4% in direct costs of revenue. The increase is primarily due to the acquisition of Tapped and new shops.

	For the three months ended				For the three months ended
	June 30, 2018				May 31, 2017
Direct costs of revenue:
Coffee and complementary food products	$	1,731,696	£	1,310,210	$	874,210	£	678,837
Coffee school		3,197		2,419		625		485
Management fees		57,514		43,539		28,458		22,098
Total	$	1,792,407	£	1,356,168	$	903,293	£	701,420

General and Administrative Expenses

For the three months ended June 30, 2018, general and administrative expenses were $1,242,075 compared to $385,397 for the three months ended May 31, 2017, or an increase of $856,678. The expenses for the three months ended June 30, 2018, were as follows: professional fees, $161,216; rent, $381,276; depreciation and amortization, $91,681; and other, $607,902. The expenses for the three months ended May 31, 2017, were as follows: professional fees, $19,253; rent, $124,253; depreciation and amortization, $51,070; and other, $190,821. The increase in general and administrative expenses during the three months ended June 30, 2018, as compared to May 31, 2017, are primarily a result of the increase in operating expenses associated with opening new coffee shop locations and the acquisition of Tapped.

Net Loss

The Company generated net loss before taxes and non-controlling interest of $949,125 for the three months ended June 30, 2018, compared to net loss before taxes and non-controlling interest of $130,981 for the three months ended May 31, 2017. For both comparative periods, the Company’s primary expenses were direct costs of revenue. As discussed above, the costs associated with setting up new locations and the acquisition of Tapped resulted in much of the increase in expenses which reduces our net income during the three months ended June 30, 2018, as compared to the three months ended May 31, 2017.

4

For the Six Months Ended June 30, 2018 and May 31, 2017

Revenue

For the six months ended June 30, 2018, the Company had $3,914,743 of revenue, compared to $2,084,049 for the six months ended May 31, 2017. Revenue in U.S. Dollars increased by 87.8%, as a result of multiple new coffee shop locations being in service during the six months ended June 30, 2018, as well as the effect of the acquisitions of Tapped, Bea’s, Roasted Rituals and Tradewind, as compared to the six months ended May 31, 2017. In the six months ended June 30, 2018, the Company had 28 coffee shop locations in operation, with four of the shops being acquired in the acquisition of Tapped, five of the shops being acquired in the acquisition of Bea’s, and one shop each in the acquisitions of Tradewind and Roasted Rituals. The revenue for the six months ended June 30, 2018 for Tapped was $1,056,081. The revenues for Bea’s was $166,201 for approximately 40 days. Tradewind and Roasted Rituals was immaterial as the acquisitions were completed late in the second quarter. The revenue for the six months ended June 30, 2018, without Tapped, was $2,858,662, which was an increase of the prior year of $774,613, or 37.2%. Additionally, coffee shops opened in the prior year performed within management’s expectations for the six months ended June 30, 2018. Company revenues, by revenue class, are as follows:

	For the six months ended				For the six months ended
	June 30, 2018				May 31, 2017
Revenues:
Coffee and complementary food products	$	3,538,442	£	2,651,111	$	1,826,925	£	1,459,928
Coffee school		6,786		5,083		6,906		5,520
Management fees		369,515		276,776		250,218		199,946
Total	$	3,914,743	£	2,932,970	$	2,084,049	£	1,665,394

Operating Expenses

Direct costs of Revenue

For the six months ended June 30, 2018, direct costs of revenue were $2,939,127 compared to $1,619,074 for the six months ended May 31, 2017. Direct costs of revenue reflect an increase of $1,320,053, or 81.5% in direct costs of revenue. The increase is primarily due to the acquisition of Tapped and new shops. The direct costs of revenue for the six months ended June 30, 2018, without Tapped, was $2,197,940, which was an increase of $578,866, or 35.8%.

	For the six months ended				For the six months ended
	June 30, 2018				May 31, 2017
Direct costs of revenue:
Coffee and complementary food products	$	2,819,984	£	2,116,349	$	1,554,987	£	1,223,067
Coffee school		6,108		4,575		5,558		4,429
Management fees		113,035		84,666		58,529		46,138
Total	$	2,939,127	£	2,205,590	$	1,619,074	£	1,273,634

General and Administrative Expenses

For the six months ended June 30, 2018, general and administrative expenses were $1,903,249 compared to $799,727 for the six months ended May 31, 2017, or an increase of $1,103,522. The expenses for the six months ended June 30, 2018, were as follows: professional fees, $184,254; rent, $588,477; depreciation and amortization, $173,366; property taxes, $10,051; and other, $947,101. The expenses for the six months ended May 31, 2017, were as follows: professional fees, $71,567; rent, $223,373; depreciation and amortization, $93,854; and other, $410,933. The increase in general and administrative expenses during the six months ended June 30, 2018, as compared to May 31, 2017, are primarily a result of the increase in operating expenses associated with opening new coffee shop locations and the acquisition of Tapped.

Net Loss

The Company generated net loss before taxes and non-controlling interest of $940,772 for the six months ended June 30, 2018, compared to net loss before taxes and non-controlling interest of $344,610 for the six months ended May 31, 2017. For both comparative periods, the Company’s primary expenses were direct costs of revenue. As discussed above, the costs associated with setting up new locations and the acquisition of Tapped resulted in much of the increase in expenses which reduces our net income during the six months ended June 30, 2018, as compared to the six months ended May 31, 2017.

The Company has one customer, which, for the six months ended June 30, 2018 and May 31, 2017, had sales of $444,833 (£333,191, 11.4% of total revenue) and $349,798 (£274,432, 16.8% of total revenue), respectively. The Company has a contract with the customer that expires in February 2020.

Liquidity and Capital Resources

General

At June 30, 2018, the Company had cash and cash equivalents of $347,641. The Company has historically met its cash needs through a combination of cash flows from operating activities and proceeds from private placements of our securities and loans. The Company plans to continue meeting its cash needs through the same methods used historically.

The Company’s operating activities provided cash of $85,774 for the six months ended June 30, 2018 and used cash of $265,801 for the six months ended May 31, 2017, respectively. The principal elements of cash flow from operations for the six months ended June 30, 2018, included a net loss of $939,467, and an increase in accounts payable of $570,597 and accrued expenses of $926,238, offset primarily by an increase in accounts receivable of $238,126 and an increase in prepaid expenses of $207,096.

Cash used in investing activities during the six months ended June 30, 2018, was $456,610 compared to $564,931 during the six months ended May 31, 2017, which was primarily related in both periods to the acquisition of fixed assets and Tapped.

5

Cash provided by the Company’s financing activities was $579,127 for the six months ended June 30, 2018, compared to cash provided by financing activities of $938,036 during the six months ended May 31, 2017.

As of June 30, 2018, current liabilities exceeded current assets. Current assets were $1,175,832 at December 31, 2017 and $1,963,603 at June 30, 2018, whereas current liabilities increased from $2,001,715 at December 31, 2017, to $4,011,447 at June 30, 2018.

	For the six months ended
	June 30, 2018			May 31, 2017
Cash provided by (used in) operating activities	$	85,774		$	(265,801	)
Cash used in investing activities		(456,610	)		(564,931	)
Cash provided by financing activities		579,127			938,036
Net changes to cash	$	208,291		$	107,304

Going Concern

The Company has a net loss attributable to common shareholders for the six months ended June 30, 2018 of $939,467 and a working capital deficit as of June 30, 2018 of $2,047,845, and has cash provided by operations of $85,774 for the six months ended June 30, 2018. In addition, as of June 30, 2018, the Company had a stockholders’ deficit and accumulated deficit of $1,399,902 and $3,422,375, respectively. Without further funding, these conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The ability of the Company to continue its operations is dependent on the execution of management’s plans, which include the raising of capital through the debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working capital requirements. If the Company were not to continue as a going concern, it would likely not be able to realize its assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of the consolidated financial statements.

There can be no assurances that the Company will be successful in generating additional cash from the equity/debt markets or other sources to be used for operations. The consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary. Based on the Company’s current resources, the Company will not be able to continue to operate without additional immediate funding. Should the Company not be successful in obtaining the necessary financing to fund its operations, the Company would need to curtail certain or all operational activities and/or contemplate the sale of its assets, if necessary.

Off Balance Sheet Arrangements

The Company currently has no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities 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. Actual results could differ from those estimates. Significant estimates in the accompanying financial statements include the amortization period for intangible assets, valuation and impairment valuation of intangible assets, depreciable lives of the web site and property and equipment, valuation of warrant and beneficial conversion feature debt discounts, valuation of share-based payments and the valuation allowance on deferred tax assets.

Changes in Accounting Principles. No significant changes in accounting principles were adopted during the period ended June 30, 2018.

Impairment of Long-Lived Assets. The Company accounts for long-lived assets in accordance with the provisions of Statement of Financial Accounting Standards ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets.” This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Fair Value of Financial Instruments and Fair Value Measurements. The Company measures their financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our financial instruments, including cash, accounts payable, accrued expenses escrow liability and short-term loans the carrying amounts approximate fair value due to their short maturities.

6

We have adopted accounting guidance for financial and non-financial assets and liabilities. The adoption did not have a material impact on our results of operations, financial position or liquidity. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

Revenue Recognition. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This update provides a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. We have adopted this update. We do not believe this guidance will impact the recognition of our primary source of revenue from company-owned coffee shops. We also do not believe the adoption of this guidance will have a material impact on our consolidated financial statements.

The Company has primary revenue streams as follows:

● Sale of coffee and complementary food products to consumer.

● Coffee school.

● Coffee services.

Stock-Based Compensation. The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees. The Company accounts for non-employee share-based awards in accordance with ASC Topic 505-50. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model.

See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 1, “Summary of Significant Accounting Policies” in our audited financial statements for the year ended August 31, 2017, included in our Annual Report on Form 10-K, as filed on December 18, 2017, for a discussion of our critical accounting policies and estimates.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a company’s controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its chief executive and chief financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC’s rules and forms and that information required to be disclosed is accumulated and communicated to the chief executive and interim chief financial officer to allow timely decisions regarding disclosure.

7

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are not effective as of such date. The Chief Executive Officer and Chief Financial Officer have determined that the Company continues to have the following deficiencies which represent a material weakness:

1.	The Company intends to appoint additional independent directors;
2.	Lack of in-house personnel with the technical knowledge to identify and address some of the reporting issues surrounding certain complex or non-routine transactions. With material, complex and non-routine transactions, management has and will continue to seek guidance from third-party experts and/or consultants to gain a thorough understanding of these transactions;
3.	Insufficient personnel resources within the accounting function to segregate the duties over financial transaction processing and reporting;
4.	Insufficient written policies and procedures over accounting transaction processing and period end financial disclosure and reporting processes.

To remediate our internal control weaknesses, management intends to implement the following measures:

● The Company will add sufficient number of independent directors to the board and appoint additional member(s) to the Audit Committee.

● The Company will add sufficient accounting personnel to properly segregate duties and to effect a timely, accurate preparation of the financial statements.

● The Company will hire staff technically proficient at applying U.S. GAAP to financial transactions and reporting.

● Upon the hiring of additional accounting personnel, the Company will develop and maintain adequate written accounting policies and procedures.

The additional hiring and appointment of independent directors will be addressed in the future.

Changes in Internal Control Over Financial Reporting

As described herein, we experienced a change of control as a result of the acquisition of DEPT-UK. In connection with the acquisition, (i) Stefan Allesch-Taylor and Matthew Gill were appointed to serve on our Board of Directors, serving as Chairman and Vice-Chairman, respectively, Ashley Lopez was appointed as our Chief Executive Officer and President, and Kazi Shahid was appointed Chief Financial Officer. Due to acquisition and our modified business plan, we are in the process of finalizing our controls over our new business operations and processes. In March 2017, Mr. Shahid resigned as Chief Financial Officer of the Company and its subsidiary, DEPT-UK, and our Chief Executive Officer, Ms. Lopez, assumed, on an interim basis, the duties of the Chief Financial Officer. There are no changes in our internal controls over financial reporting other than as described above.

Limitations on the Effectiveness of Controls

The Company’s management, including the CEO and CFO, which is the same person, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of the control system must reflect that there are resource constraints and that the benefits must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part 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. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

8

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

There are no pending legal proceedings in which we are a party or in which any of our directors, officers or affiliates, any owner of record or beneficiary of more than 5% of any class of our voting securities is a party adverse to us or has a material interest adverse to us. Our property is not the subject of any pending legal proceedings.

Item 1A. Risk Factors

Not required.

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

None.

The shares described above were issued or will be issued based on exemptions from registration under Section 4(a)(2) of the Securities Act of 1933 and Regulation D promulgated thereunder as there was no general solicitation, and the transactions did not involve a public offering.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

Number	Description
3.1	Articles of Incorporation (incorporated by reference to our Registration Statement on Form S-1, filed on July 22, 2013)
3.2	Bylaws (incorporated by reference to our Registration Statement on Form S-1, filed on July 22, 2013)
3.3	Certificate of Amendment, Change of Name (incorporated by reference to our Current Report on Form 8-K filed on August 16, 2016)
3.4	Certificate of Amendment, Change of Fiscal Year (incorporated by reference to our Current Report on Form 8-K filed on August 16, 2016)
10.1	Acquisition Agreement between DOCASA, Inc. (f/k/a FWF Holdings, Inc.) and Department of Coffee and Social Affairs Limited (incorporated by reference to our Current Report on Form 8-K filed on September 6, 2016)
10.2	Employment agreement with Ashley Lopez (incorporated by reference to our Current Report on Form 8-K filed on January 20, 2017)
10.3	Consulting agreement with Clearbrook Capital Partners LLP (incorporated by reference to our Current Report on Form 8-K filed January 20, 2017)
10.4	Acquisition agreement between Department of Coffee and Social Affairs Limited and Tapped and Packed Ltd.
31 (1)	Certification of Principal Executive Officer and Principal Financial Officer of DOCASA, Inc. required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32 (1)	Certification of Principal Executive Officer of DOCASA, Inc. pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 Of 18 U.S.C. 63
99.1	Unaudited Pro-Forma Condensed Combined Financial Statements (incorporated by reference to our Current Report on Form 8-K filed on January 20, 2017)
101.INS (1)	XBRL Taxonomy Extension Instance Document
101.SCH (1)	XBRL Taxonomy Extension Schema Document
101.CAL (1)	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF (1)	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB (1)	XBRL Taxonomy Extension Label Linkbase Document
101.PRE (1)	XBRL Taxonomy Extension Presentation Linkbase Document

(1) Filed herewith

9

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: August 27, 2018	By:	/s/ Ashley Lopez
		Ashley Lopez
		Principal Executive Officer and Interim Principal Financial Officer

10

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Ashley Lopez, certify that:

1.	I have reviewed this report on Form 10-Q of DOCASA, 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 quarterly 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 Small Business Issuer as of, and for, the periods presented in this quarterly report;
4.	The Small Business Issuer’s other certifying officers 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 Small Business Issuer and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	[Omitted pursuant to SEC Release No. 33-8238];
(c)	Evaluated the effectiveness of the Small Business Issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the Small Business Issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. The Small Business Issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors of the small business issuer’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 small business issuer’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 small business issuer’s internal control over financial reporting.

Date: August 27, 2018	By:	/s/ Ashley Lopez
		Ashley Lopez
		Chief Executive Officer and Interim Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF

PRINCIPAL EXECUTIVE OFFICER

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 Report of DOCASA, Inc., (the “Company”) on Form 10-Q for the period ended June 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ashley Lopez, the Chief Executive Officer and Interim Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 27, 2018	By:	/s/ Ashley Lopez
		Ashley Lopez
		Chief Executive Officer and Interim Chief Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 23, 2018
Document And Entity Information
Entity Registrant Name	DOCASA Inc.
Entity Central Index Key	0001619055
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		209,033,239
Trading Symbol	DCSA
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2018

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash	$ 347,641	$ 139,350
Accounts receivable	781,821	531,872
Other receivables	351	8,183
Prepaid expenses	695,030	396,041
Inventory	138,760	100,386
Total current assets	1,963,603	1,175,832
Fixed assets, net	2,600,424	1,957,650
Intangible assets, net	9,561	12,559
Other receivables	39,620	40,509
Goodwill	4,262,492	2,185,012
Deposits	283,122	233,966
Total assets	9,158,822	5,605,528
Current liabilities:
Notes payable, current portion	169,335	171,160
Accounts payable	1,579,289	869,388
Accrued expenses	1,742,707	529,324
Accounts payable to related parties	70,443	65,855
Taxes payable	244,665	120,807
Capital leases obligations, current portion	172,348	209,539
Deferred revenue	32,661	35,642
Total current liabilities	4,011,448	2,001,715
Non-current liabilities:
Notes payable, non-current portion (includes $11,164 and $11,414 to related parties for June 30, 2018 and December 31, 2017, respectively)	281,995	357,095
Capital leases obligations, non-current portion	305,403	370,681
Other long-term liabilities	290,728	1,206
Total long-term liabilities	878,126	728,982
Total liabilities	4,889,574	2,730,697
Commitments and contingencies (Note 9)
Shareholders' deficit:
Common stock, $0.001 par value, 250,000,000 shares authorized, 160,012,875 and 160,012,875 shares issued and outstanding, at June 30, 2018 and December 31, 2017, and 47,087,125 and 47,087,125 conditionally issuable, at June 30, 2018 and December 31, 2017, respectively	209,033	207,100
Additional paid-in capital	2,386,049	758,933
Accumulated other comprehensive loss	(572,609)	(301,958)
Accumulated deficit	(3,422,375)	(2,482,908)
Total DOCASA, Inc. shareholders' deficit	(1,399,902)	(1,818,833)
Non-controlling interest:
Preference shares of DEPT-UK (25,000,000 shares authorized, £1 par value, 4,319,641 and 3,557,796 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively)	5,669,150	4,693,664
Total liabilities and shareholders' deficit	9,158,822	5,605,528
Common Class A [Member]
Shareholders' deficit:
Ordinary shares
Common Class B [Member]
Shareholders' deficit:
Ordinary shares

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical)	Jun. 30, 2018 USD ($) $ / shares $ / unit shares	Dec. 31, 2017 USD ($) $ / shares $ / unit shares
Notes payable related parties | $	$ 11,164	$ 11,414
Common stock, par value | $ / shares	$ 0.001	$ 0.001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	160,012,875	160,012,875
Common stock, shares outstanding	160,012,875	160,012,875
Conditionally issuable	47,087,125	47,087,125
Preference shares, shares issued	682,282
DEPT-UK [Member]
Preference shares, shares authorized	25,000,000	25,000,000
Preference shares, par value | $ / shares	$ 1	$ 1
Preference shares, shares issued	4,319,641	3,557,796
Preference shares, shares outstanding	4,319,641	3,557,796
Common Class A [Member]
Ordinary shares, shares authorized	25,000,000	25,000,000
Ordinary shares, par value | $ / unit	1	1
Ordinary shares, shares issued	0	243,800
Ordinary shares, shares outstanding	0	243,800
Common Class B [Member]
Ordinary shares, shares authorized	10,000,000	10,000,000
Ordinary shares, par value | $ / unit	1	1
Ordinary shares, shares issued	0	0
Ordinary shares, shares outstanding	0	0

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	May 31, 2017	Jun. 30, 2018	May 31, 2017
Income Statement [Abstract]
Revenue, net	$ 2,091,034	$ 1,163,202	$ 3,914,743	$ 2,084,049
Operating expenses
Direct costs of revenue	1,792,407	903,293	2,939,127	1,619,074
Professional fees	161,216	19,253	184,254	71,567
Rent	381,276	124,253	588,477	223,373
Depreciation and amortization	91,681	51,070	173,366	93,854
Property taxes			10,051
Other general and administrative expenses	607,903	190,821	947,101	410,933
Operating loss	(943,449)	(125,488)	(927,633)	(334,752)
Other income (expense)
Interest expense	(7,151)	(5,241)	(13,139)	(9,858)
Loss before provision for income taxes	(950,600)	(130,729)	(940,772)	(344,610)
Provision for income tax
Net loss before tax and non-controlling interest	(950,600)	(130,729)	(940,772)	(344,610)
Loss (income) attributable to non-controlling interest	1,475	(252)	1,305	(653)
Net loss attributable to common shareholders	(949,125)	(130,981)	(939,467)	(345,263)
Foreign currency translation loss	144,979	(30,348)	(270,651)	(46,201)
Total comprehensive loss	$ (804,146)	$ (161,329)	$ (1,210,118)	$ (391,464)
Net loss attributable to common shareholders per share - basic	$ (0.01)	$ (0.00)	$ (0.01)	$ (0.00)
Weighted average number of shares outstanding - basic	160,820,162	147,991,502	160,418,748	146,800,000

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2018	May 31, 2017
Cash flows from operating activities:
Net loss attributable to common shareholders	$ (939,467)	$ (345,263)
Adjustments to reconcile net loss before taxes and non-controlling interest to net cash provided by (used in) operations:
Depreciation and amortization expense	173,366	93,854
Loss on disposal of intangible assets	2,801
Other comprehensive income	(270,651)	(46,201)
Non-controlling interest gain	1,305	(653)
Changes in operating assets and liabilities:
Accounts receivable	(238,126)	(85,565)
Other receivables	8,722
Prepaid expenses	(207,096)	(71,702)
Inventory	(2,063)	(47,836)
Other non-current receivables		(1,244)
Deposits	5,201	(2,805)
Accounts payable	570,597	134,071
Accounts payable to related parties	4,588	31,746
Accrued expenses	926,238	(39,655)
Taxes payable	123,858	18,654
Deferred revenue	(2,981)	12,397
Other non-current liabilities	(70,518)	84,401
Net cash provided by (used in) operating activities	85,774	(265,801)
Cash flows used in investing activities:
Acquisition of fixed assets	(417,065)	(564,931)
Cash paid for Roasted Rituals, net	(22,018)
Cash paid in purchase of Tradewind	(17,527)
Net cash used in investing activities	(456,610)	(564,931)
Cash flows from financing activities:
Proceeds from notes payable	270,497	938,036
Payment on capital leases	(161,137)
Proceeds from issuance of preference shares	863,120
Issuance of common stock for settlement of debt
Payments on notes payable	(393,353)
Net cash provided by financing activities	579,127	938,036
Net increase in cash	208,291	107,304
Cash at beginning of period	139,350	86,366
Cash at end of period	347,641	193,670
Supplemental disclosure of cash flow information:
Cash paid for interest	4,850	4,617
Cash paid for taxes
Non-cash investing and financing activities:
Issuance of preference shares for liabilities	111,061	719,934
Issuance of common shares for note payable		372,694
Fair value of shares issued for acquisition	1,629,049
Capital lease additions	$ 58,668

XML

Nature of Business and Presentation

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Nature of Business and Presentation

NOTE 1 – NATURE OF BUSINESS AND PRESENTATION

Organization

DOCASA, Inc. (the “Company,” “we,” “us,” “our,” or “DOCASA”) was incorporated in the State of Nevada on July 22, 2014, under the name of FWF Holdings, Inc. The Company changed its name on August 4, 2016. The Company was originally engaged in the business of commercial production and distribution of hot sauce (see Note 3). On August 4, 2016, the Company changed its year end from July 31 to August 31.

On July 8, 2016, the Company experienced a change in control. Atlantik LP (“Atlantik”), a related party, acquired a majority of the issued and outstanding common stock of the Company in accordance with a stock purchase agreement by and between Atlantik and Nami Shams (the “Seller”). On the closing date, July 8, 2016, pursuant to the terms of the stock purchase agreement, Atlantik purchased from the Seller 115,000,000 shares of the Company’s outstanding restricted common stock for $200,000, representing 75.8% of the Company’s outstanding common stock at that time.

On September 1, 2016, the Company acquired 99.8% of the voting stock of the Department of Coffee and Social Affairs Limited, a United Kingdom corporation (the “DEPT-UK”), and the Company agreed to issue DEPT-UK’s majority shareholder 170,000,000 shares of the Company’s common stock—110,000,000 shares initially and 60,000,000 shares at a time determined by the Company’s Board of Directors but no later than August 31, 2017, which deadline was subsequently extended to August 31, 2019. Also, on September 1, 2016, the Company acquired 115,000,000 shares of the Company’s common stock from Atlantik in exchange for issuing Atlantik a promissory note for $320,000, which shares were then cancelled, and which note has since been paid in full. As a result of the acquisition and the issuance of the initial 110,000,000 shares of common stock, and the cancellation of the 115,000,000 Atlantik shares, DEPT-UK is now the majority-owned subsidiary of the Company, and the Company experienced a change of control.

DEPT-UK formed a wholly-owned subsidiary, Department of Coffee and Internal Affairs Limited (“DCIA”), on September 11, 2014, as filed with the Registrar of Companies for England and Wales. As of June 30, 2018, DCIA has had no operations or activity.

On April 5, 2017, the Company formed Department of Coffee and Social Affairs IL, Inc. (“DEPT-IL”), an Illinois corporation.

On May 18, 2017, the Company formed Department of Coffee and Social Affairs White Space Limited (“DEPT-UKWS”), as filed with the Registrar of Companies for England and Wales. DEPT-UKWS is a subsidiary of DEPT-UK.

For financial reporting purposes, the acquisition of DEPT-UK and the change of control in connection with acquisition represented a “reverse merger” rather than a business combination, and DEPT-UK is deemed to be the accounting acquirer in the transaction. For the periods subsequent to August 31, 2016, the acquisition is being accounted for as a reverse-merger and recapitalization. DEPT-UK is the acquirer for financial reporting purposes, and the Company (DOCASA, Inc., f/k/a FWF Holdings, Inc.) is the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the acquisition are those of DEPT-UK and have been recorded at the historical cost basis of DEPT-UK, and the financial statements after completion of the acquisition include the assets and liabilities of both the Company and DEPT-UK, and the historical operations of DEPT-UK prior to closing and operations of both companies from the closing of the acquisition.

On January 2, 2018, with an effective date of November 1, 2017, DEPT-UK acquired Tapped and Packed Ltd (“Tapped”), an UK company, for a combination of cash and shares of common stock of the Company. See Note 2. Tapped became a subsidiary of DEPT-UK as a result of the transaction. Tapped has four shop locations in the UK which serve coffee and food.

On February 23, 2018, the Board of Directors determined to change the Company’s fiscal year end to December 31 from August 31. The Company believes this change will benefit the Company by aligning its reporting periods to be more consistent with peer coffee companies.

On May 23, 2018, DEPT-UK acquired Bea’s of Bloomsbury Limited (“Bea’s”), an UK company, for shares of common stock of the Company. See Note 2. Bea’s became a subsidiary of DEPT-UK as a result of the transaction. Bea’s has five shop locations in the UK which serves coffee and food.

On June 29, 2018, DEPT-UK acquired Tradewind Espresso Ltd (“Tradewind”), an UK company, for cash. See Note 2. Tradewind became a subsidiary of DEPT-UK as a result of the transaction. Tradewind has one shop location in the UK which serves coffee and food.

On June 29, 2018, DEPT-UK acquired Roasted Rituals Coffee Ltd (“Roasted Rituals”), an UK company, for cash. See Note 2. Roasted Rituals became a subsidiary of DEPT-UK as a result of the transaction. Roasted Rituals is a specialty coffee roaster and has one location in the UK.

Nature of Operations

We are in the specialty coffee industry, specifically with company-operated stores. The Company will generate revenue through sales at nineteen existing company-operated coffee shop locations in the UK, with seven more locations under construction. Similar to other leading operators, we sell our proprietary coffee and related products, and complementary food and snacks.

Principles of Consolidation

The consolidated financial statements include the accounts of DOCASA and its subsidiaries, DEPT-UK, DCIA, DEPT-IL and DEPT-UK’s subsidiaries, Tapped, Bea’s, Roasted Rituals, Tradewind, and DEPT-UKWS. All significant inter-company balances and transactions have been eliminated in consolidation.

Basis of Presentation

The accompanying unaudited consolidated condensed financial statements of DOCASA have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and done under §240.13(a) of the Securities Act. The results of operations for the interim period ended June 30, 2018 shown in this report are not necessarily indicative of results to be expected for the full fiscal year ending December 31, 2018. In the opinion of the Company’s management, the information contained herein reflects all adjustments (consisting of normal recurring adjustments, unless otherwise indicated) necessary for a fair presentation of the Company’s results of operations, financial position and cash flows. The unaudited interim financial statements should be read in conjunction with the audited financial statements in the Company’s Form 10-K for the year ended August 31, 2017, filed on December 18, 2017 and Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities 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. Actual results could differ from those estimates. Significant estimates in the accompanying financial statements include the amortization period for intangible assets, valuation and impairment valuation of intangible assets, allowance for accounts receivable, estimated lives of intangible and fixed assets, and valuation of share-based payments.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Accounts Receivable

Accounts receivable consisted of amounts due from customers primarily for management fees. The Company considered accounts more than 30 days old to be past due. The Company used the allowance method for recognizing bad debts. When an account was deemed uncollectible, it was written off against the allowance. The Company generally does not require collateral for its accounts receivable. Management has not recorded an allowance for doubtful accounts as of June 30, 2018 or December 31, 2017.

Inventory

Inventory is recorded at the lower of cost or market and the cost of sales are recorded utilizing the first in first out (“FIFO”) method.

Fixed Assets

Property and equipment are recorded at cost. Depreciation is computed using the straight-line method based on the estimated useful lives of the related assets of three years for computer equipment, five years for office furniture and fixtures, and the lesser of the lease term or the useful life of the leased equipment. Leasehold improvements are amortized over the lesser of the lease term or the useful life of the improvements. Expenditures for maintenance and repairs along with fixed assets below our capitalization threshold are expensed as incurred.

Impairment of Long-Lived Assets

The Company accounts for long-lived assets in accordance with the provisions of Statement of Financial Accounting Standards ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets.” This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Fair Value of Financial Instruments

The Company measures its financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our financial instruments, including cash, accounts receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short maturities.

We follow accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

Revenue Recognition

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This update provides a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. We have adopted this update. We do not believe this guidance will impact the recognition of our primary source of revenue from company-owned coffee shops. The adoption of this guidance did not have a material impact on our consolidated financial statements.

Stock-Based Compensation

The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company accounts for non-employee share-based awards in accordance with the measurement and recognition provisions ASC Topic 505-50. The Company estimates the fair value of stock options at the grant date by using the Black-Scholes option-pricing model.

Advertising

Advertising is expensed as incurred and is included in other general and administrative expenses on the accompanying condensed consolidated statement of operations. For the six months ended June 30, 2018 and May 31, 2017 advertising expense was $8,068 and $23,171, respectively.

Income Taxes

The Company adopted the provisions of ASC 740, “Income Taxes.” When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying condensed consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of June 30, 2018, tax years 2014 - 2017 remain open for IRS audit and tax years 2015–2017 remain open for HM Revenue & Customs (“HMRC”) audit. The Company has received no notice of audit from the IRS or HMRC for any of the open tax years.

Net Earnings (Loss) Per Share

In accordance with ASC 260-10, “Earnings Per Share,” basic net earnings (loss) per common share is computed by dividing the net earnings (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted average number of common stock shares outstanding during the period. The Company does not currently have any potential dilutive securities outstanding as of June 30, 2018 and May 31, 2017.

Foreign Currency Translation and Transactions

The British Pound (“£”) is the functional currency of DEPT-UK and Tapped whereas the financial statements are reported in United States Dollar (“USD,” “$”). Assets and liabilities are translated based on the exchange rates at the condensed consolidated balance sheet date, while revenue and expense accounts are translated at the average exchange rates prevailing during the period. Equity accounts are translated at historical exchange rates. The resulting translation gain and loss adjustments are accumulated as a component of stockholders’ equity and other comprehensive loss.

Comprehensive Loss

The Company reports comprehensive loss and its components in its consolidated financial statements. Comprehensive loss consists of net loss on foreign currency translation adjustments affecting stockholders’ equity that, under U.S. GAAP, are excluded from net loss. As of June 30, 2018, the exchange rate between U.S. Dollars and British Pounds was US$1.32 = £1.00, and the weighted average exchange rate for the six months ended June 30, 2018 was US$1.34 = £1.00. As of December 31, 2017, the exchange rate between U.S. Dollars and British Pounds was US$1.35 = £1.00.

Going Concern

The Company had net loss attributable to common shareholders for the six months ended June 30, 2018 of $939,467 and a working capital deficit as of June 30, 2018 of $2,047,845, and has cash provided by operations of $85,774 for the six months ended June 30, 2018. In addition, as of June 30, 2018, the Company had a stockholders’ deficit and accumulated deficit of $1,399,902 and $3,422,375, respectively. Without further funding, these conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The ability of the Company to continue its operations is dependent on the execution of management’s plans, which include the raising of capital through the debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working capital requirements. If the Company were not to continue as a going concern, it would likely not be able to realize its assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of the financial statements.

There can be no assurances that the Company will be successful in generating additional cash from the equity/debt markets or other sources to be used for operations. The financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary. Based on the Company’s current resources, the Company will not be able to continue to operate without additional immediate funding. Should the Company not be successful in obtaining the necessary financing to fund its operations, the Company would need to curtail certain or all operational activities and/or contemplate the sale of its assets, if necessary.

Effect of Recent Accounting Pronouncements

The Company reviews new accounting standards and updates as issued. No new standards or updates had any material effect on these financial statements. The accounting pronouncements and updates issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these financial statements. Management does believe that some of the subsequent pronouncements will have a material effect on these financial statements as presented and does not anticipate the need for any future restatement of these financial statements because of the retro-active application of any accounting pronouncements issued subsequent to June 30, 2018 through the date these financial statements were issued.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued an ASU on lease accounting. The ASU requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to be recognized as assets and liabilities on the balance sheet. The ASU is effective for reporting periods beginning after December 15, 2018 with early adoption permitted. While the Company is still evaluating the ASU, the Company expects the adoption of the ASU to have a material effect on the Company’s financial condition due to the recognition of the lease rights and obligations as assets and liabilities. The Company expects the ASU to have a material effect on the Company’s results of operations and financial position, and the ASU will have no effect on cash flows.

ASU 2014-09, Revenue – Revenue from Contracts with Customers. In May 2014, the FASB issued a new accounting standard that requires recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. The FASB has also issued several updates to ASU 2014-09. The new standard supersedes U.S. GAAP guidance on revenue recognition and requires the use of more estimates and judgments than the present standards. It also requires additional disclosures. We adopted the new revenue guidance effective January 1, 2017, by recognizing the cumulative effect of initially applying the new standard as an increase to the opening balance of retained earnings. The effect of the adoption was immaterial, with an immaterial impact to our net income on an ongoing basis. Adoption of the new standard will also result in changes in classification between Revenues and Direct costs of revenue.

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Acquisitions

6 Months Ended

Jun. 30, 2018

Business Combinations [Abstract]

Acquisitions

NOTE 2 – ACQUISITIONS

Acquisition of Tapped and Packed Ltd

On November 1, 2017, DEPT-UK entered into an acquisition agreement (the “Tapped Acquisition Agreement”) with Tapped, a United Kingdom corporation. Richard Lilley, an individual (“Lilley”), was the owner of record of 100 capital shares of Tapped. Pursuant to the Tapped Acquisition Agreement, Tapped stock was transferred to DEPT-UK on November 1, 2017, in consideration of £175,000 and 1,546,875 shares of common stock of the Company. The £175,000 was paid in October 2017 as a prepayment to the completion date of November 1, 2017. Stefan Allesch-Taylor (“Allesch-Taylor”), Chairman of the Company, utilized his personally owned shares of common stock of the Company, and assigned the 1,546,875 shares (the “Allesch-Taylor Shares”) from his ownership to Lilley. In exchange for the use of the Allesch-Taylor Shares, which were provisionally valued at $1,918,125 (“Provisional Share Compensation Value”), the Board of Directors issued Allesch-Taylor 1,325,000 Preference Shares of DEPT-UK. The Provisional Share Compensation Value was determined by the previous day’s closing price of $1.24 per share. The Company’s common stock is thinly-traded and an insignificant amount of stock traded has historically caused significant fluctuations in the price per share of the Company’s common stock. The Company will utilize an independent third-party business valuation to determine the value of Tapped, as well as get an independent valuation of the Company’s common stock as of the date of the transaction. Management believes that the separate valuations will determine a fair and reasonable valuation thereby reducing the provisional goodwill recorded, as of June 30, 2018, of $2,185,012. The Allesch-Taylor Shares of common stock were assigned to Lilley on or about October 19, 2017 and were released in accordance to the agreement. See Notes 1, 7 and 8. Also in connection with the Tapped Acquisition Agreement, Gill and Lopez were appointed to serve on Tapped’s Board of Directors.

The following table summarizes the consideration given for DEPT-UK and the provisional fair values of the assets and liabilities assumed at the acquisition date.

Consideration given:
Cash given	$	237,877
Common stock shares given		1,918,125
Total consideration given	$	2,156,002
Fair value of identifiable assets acquired, and liabilities assumed:
Cash	$	200,582
Prepaid expense		92,052
Inventory		51,411
Fixed assets, net		73,337
Deposits		119,999
Accrued expenses		(195,621	)
Short-term note payable		(200,804	)
Director note		(168,782	)
Deferred taxes		(1,184	)
Total identifiable net liabilities		(29,010	)
Goodwill		2,185,012
Total consideration	$	2,156,002

The revenue and net loss for Tapped, as reflected in the unaudited condensed consolidated statement of operations, for the six months ended June 30, 2018, to reflect the current period, was $1,056,081 and $56,725, respectively.

Acquisition of Bea’s of Bloomsbury Limited

On May 23, 2018, DEPT-UK entered into an acquisition agreement (the “Bea’s Acquisition Agreement”) with Bea’s, a United Kingdom corporation. Pursuant to the Bea’s Acquisition Agreement, Bea’s stock was transferred to DEPT-UK on May 23, 2018, in consideration of 1,933,239 shares of common stock of the Company. As of the date of this report, the shares have not been issued to the owners of Bea’s and are recorded as issuable as of June 30, 2018, as approved by the Board of Directors of the Company. The Company’s common stock was valued at $0.84 therefore the Company recorded the value of $1,623,921. Management recorded a provisional goodwill, as of June 30, 2018, of $1,698,321, which is attributable to common synergies, the workforce, and may be adjusted based on management’s final determination of the fair value of the assets and liabilities acquired. See Notes 1, 7 and 8.

The following table summarizes the consideration given by DEPT-UK and the provisional fair values of the assets and liabilities assumed at the acquisition date.

Consideration given:
Common stock shares given	$	1,623,921
Total consideration given	$	1,623,921
Fair value of identifiable assets acquired, and liabilities assumed:
Prepaid expense	$	86,764
Inventory		36,311
Fixed assets, net		315,558
Deposits		54,357
Accounts payable		(250,365	)
Accrued expenses		(271,096	)
Short-term note payable		(45,931	)
Total identifiable net liabilities		(74,400	)
Goodwill		1,698,321
Total consideration	$	1,623,921

The revenue and loss for Bea’s, as reflected in the unaudited condensed consolidated statement of operations, for the six months ended June 30, 2018, to reflect the current period, was $166,201 and $31,562, respectively, and for the six months ended May 31, 2017, the historical financial statements are unavailable.

Acquisition of Roasted Rituals Coffee Ltd

On June 29, 2018, DEPT-UK entered into an acquisition agreement (the “Roasted Rituals Acquisition Agreement”) with Roasted Rituals, a United Kingdom corporation. Pursuant to the Roasted Rituals Acquisition Agreement, Roasted Rituals’ stock was transferred to DEPT-UK on June 29, 2018, in consideration of £175,000. The £175,000 is to be paid in tranches; £37,500 at closing, £62,500 on the first anniversary of the closing date, and £75,000 on the second anniversary of the closing date. The Company has recorded the liabilities as short-term and long-term, respectively. Management has calculated provisional goodwill of $181,593, which is attributable to common synergies, the workforce, and may be adjusted based on management’s final determination of the fair value of the assets and liabilities acquired. See Note 1 and 7.

The following table summarizes the consideration given for DEPT-UK and the provisional fair values of the assets and liabilities assumed at the acquisition date.

Consideration given:
Cash given	$	49,096
Accrued consideration		180,020
Total consideration given	$	229,116
Fair value of identifiable assets acquired, and liabilities assumed:
Cash	$	27,078
Accounts receivable, net		11,350
Fixed assets, net		11,344
Accrued expenses		(2,249	)
Total identifiable net assets		47,523
Goodwill		181,593
Total consideration	$	229,116

The revenue and loss for Roasted Rituals, as reflected in the unaudited condensed consolidated statement of operations, for the six months ended June 30, 2018, to reflect the current period, was $0 and $1,171, respectively, and for the six months ended May 31, 2017, the financial statements are unavailable.

Acquisition of Tradewind Espresso Ltd

On June 29, 2018, DEPT-UK entered into an acquisition agreement (the “Roasted Rituals Acquisition Agreement”) with Roasted Rituals, a United Kingdom corporation. Pursuant to the Roasted Rituals Acquisition Agreement, Roasted Rituals’ stock was transferred to DEPT-UK on June 29, 2018, in consideration of £175,000. The £175,000 is to be paid in tranches; £37,500 at closing, £62,500 on the first anniversary of the closing date, and £75,000 on the second anniversary of the closing date. The Company has recorded the liabilities as short-term and long-term, respectively. Management has calculated provisional goodwill of $197,565, which is attributable to common synergies, the workforce, and may be adjusted based on management’s final determination of the fair value of the assets and liabilities acquired. See Note 1 and 7.

The following table summarizes the consideration given by DEPT-UK and the provisional fair values of the assets and liabilities assumed at the acquisition date.

Consideration given:
Cash given	$	49,096
Accrued consideration		180,020
Total consideration given	$	229,116
Fair value of identifiable assets acquired, and liabilities assumed:
Cash	$	31,569
Accounts receivable, net		473
Fixed assets, net		13,308
Accrued expenses		(13,799	)
Total identifiable net assets		31,551
Goodwill		197,565
Total consideration	$	229,116

The revenue and loss for Tradewinds, as reflected in the unaudited condensed consolidated statement of operations, for the six months ended June 30, 2018, to reflect the current period, was $0 and $3,226, respectively, and for the six months ended May 31, 2017, the financial statements were unavailable.

Pro-Forma Financial Information

The following unaudited pro-forma data summarizes the result of the operations for the six months ended June 30, 2018 and May 31, 2017, as if the acquisition of Bea’s, Roasted Rituals and Tradewind had been completed on September 1, 2016, which was the beginning of the Company’s previous adjusted fiscal year (for comparison purposes) prior to the change to a calendar year end in March 2018. The pro-forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place on September 1, 2016.

	For the Six Months Ended June 30, 2018
										Roasted						Pro-forma
	DOCASA			Tapped			Bea’s			Rituals			Tradewind			Adjustments		Combined
Revenue, net	$	2,692,461		$	1,056,081		$	1,022,579		$	63,790		$	186,961		$	-	$	5,021,873
Operating expenses		4,642,058			1,112,806			1,223,736			66,380			204,933			-		7,249,913
Loss from operations		(1,949,597	)		(56,725	)		(201,156	)		(2,590	)		(17,972	)		-		(2,228,040	)
Other income (expense)		(11,297	)		-			-			-			-			-		(11,297	)
Loss before income taxes		(1,960,894	)		(56,725	)		(201,156	)		(2,590	)		(17,972	)		-		(2,239,337	)
Net Loss attributable to common shareholders	$	(1,960,894	)	$	(56,725	)	$	(201,156	)	$	(2,590	)	$	(17,972	)	$	-	$	(2,239,337	)
Net income (loss) per common share - basic	$	(0.01	)															$	(0.01	)
Weighted average number of common shares outstanding during the period - basic		151,143,287																	151,143,287

	For the Six Months Ended May 31, 2017
	DOCASA			Tapped		Bea’s (a)		Roasted Rituals		Tradewind			Pro-forma Adjustments		Combined
Revenue, net	$	1,100,939		$	983,110	$	-	$	81,233	$	186,420		$	-	$	2,351,702
Operating expenses		1,722,031			696,770		-		55,559		195,201			-		2,669,561
Income (loss) from operations		(621,092	)		286,340		-		25,674		(8,781	)		-		(317,859	)
Other income (expense)		(9,858	)		-		-		-		-			-		(9,858	)
Income (loss) before income taxes		(630,950	)		286,340		-		25,674		(8,781	)		-		(327,717	)
Net income (loss) attributable to common shareholders	$	(630,950	)	$	286,340	$	-	$	25,674	$	(8,781	)	$	-	$	(327,717	)
Net loss per common share - basic	$	(0.00	)												$	(0.00	)
Weighted average number of common shares outstanding during the period - basic		146,800,000														146,800,000

(a) Historical financial statements unavailable.

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Inventory

6 Months Ended

Jun. 30, 2018

Inventory Disclosure [Abstract]

Inventory

NOTE 3 – INVENTORY

The Company has inventory of various items used for the sale of coffee and complementary products. As of June 30, 2018, and December 31, 2017, the Company had inventory of $138,760 and $100,386, respectively. The Company accounts for its inventory using the lower of cost or market and the cost of sales are recorded utilizing the first in first out (“FIFO”) method.

The inventory is as follows:

	June 30, 2018		December 31, 2017
Consumable products	$	37,402	$	37,750
Cold brew		12,761		7,119
Retail products		36,820		18,725
Food and drinks		51,777		36,792
Total inventory	$	138,760	$	100,386

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Fixed Assets

6 Months Ended

Jun. 30, 2018

Property, Plant and Equipment [Abstract]

Fixed Assets

NOTE 4 – FIXED ASSETS

The Company has fixed assets including computer equipment, office equipment, site equipment and machinery, site fit out costs, site furniture, fixtures and fittings.

The depreciation expense for the six months ended June 30, 2018 and May 31, 2017, was $170,565 and $90,330, respectively. The variance between the expense and the increase in accumulated depreciation is due to timing of the currency translation calculation.

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Intangible Assets

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

NOTE 5 – INTANGIBLE ASSETS

Website Development

The Company has intangible assets related to website development. The amortization of the intangible assets is over a three-year period.

The amortization expense for the six months ended June 30, 2018 and May 31, 2017, was $2,801 and $3,524, respectively. The variance between the expense and the increase in accumulated amortization is due to timing of the currency translation calculation.

Goodwill

The Company has goodwill related to the acquisitions of Tapped, Bea’s, Tradewind and Roasted Rituals. The Company has not determined the deductibility of goodwill for tax purposes. As of June 30, 2018, the Company has $4,262,492 of goodwill, as allocated below:

Balance, December 31, 2017	$	2,185,012
Acquisitions		2,077,480
Balance, June 30, 2018	$	4,262,492

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Notes Payable

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Notes Payable

NOTE 6 – NOTES PAYABLE

The Company has notes payable as of June 30, 2018 and December 31, 2017, are as follows:

Notes payable - current

	June 30, 2018						December 31, 2017
			Accrued						Accrued
	Principal		Interest		Total		Principal		Interest		Total
Arch Investments	$	2,194	$	-	$	2,194	$	2,194	$	-	$	2,194
Arch Investments		5,067		-		5,067		5,067		-		5,067
Arch Investments		5,065		-		5,065		5,065		-		5,065
Arch Investments		15,873		-		15,873		15,873		-		15,873
Arch Investments		4,349		-		4,349		4,349		-		4,349
HSBC		109,536		-		109,536		111,970		-		111,970
HSBC		27,251		-		27,251		26,642		-		26,642
Total	$	169,335	$	-	$	169,335	$	171,160	$	-	$	171,160

Notes payable - non-current

	June 30, 2018						December 31, 2017
			Accrued						Accrued
	Principal		Interest		Total		Principal		Interest		Total
Deij Capital Limited (1)	$	11,164	$	-	$	11,164	$	11,414	$	-	$	11,414
HSBC		219,072		-		219,072		280,011		-		280,011
HSBC		51,759		-		51,759		65,670		-		65,670
Total	$	281,995	$	-	$	281,995	$	357,095	$	-	$	357,095

(1) Related party

On July 1, 2014, DEPT-UK entered into a business loan with Deij Capital Limited (“Deij Capital”), a related party in which Gill is the director and owner. The loan is for 3 years, with an interest rate of 0%. The note was extended to July 1, 2018. The imputed interest is deemed immaterial as of June 30, 2018. The facility loan was for $171,437 (£100,000) to be drawn down as and when required. On June 30, 2016, Deij Capital converted the balance due of $179,534 (£135,464) into 135,464 shares of Preference Shares. On May 31, 2017, Deij Capital converted of the balance due $63,990 (£51,500) into 51,500 shares of Preference Shares. The outstanding principal as of June 30, 2018 and December 31, 2017 was $11,164 (£8,454) and $11,414 (£8,454), respectively. The accrued interest as of June 30, 2018 and December 31, 2017, was $0 (£0) and $0 (£0), respectively.

On July 31, 2014, DOCASA executed a promissory note for $2,194 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. The imputed interest is deemed immaterial as of June 30, 2018. As of June 30, 2018, and December 31, 2017, the principal was $2,194. This note was acquired by Arch Investments, LLC.

On April 30, 2015, DOCASA executed a promissory note for $5,067 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. On July 20, 2016, Arch Investments, LLC acquired this promissory note due to Nami Shams. The imputed interest is deemed immaterial as of June 30, 2018. As of June 30, 2018, and December 31, 2017, the principal was $5,067.

On July 31, 2015, DOCASA executed a promissory note for $5,065 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. The imputed interest is deemed immaterial as of June 30, 2018. As of June 30, 2018, and December 31, 2017, the principal was $5,065. This note was acquired by Arch Investments, LLC.

On October 31, 2015, DOCASA executed a promissory note for $15,873 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. The imputed interest is deemed immaterial as of June 30, 2018. As of June 30, 2018, and December 31, 2017, the principal was $15,873. This note was acquired by Arch Investments, LLC.

On January 31, 2016, DOCASA executed a promissory note for $4,349 with Nami Shams, a former officer and director of the Company. The note has no set term of repayment and is non-interest bearing. The imputed interest is deemed immaterial as of June 30, 2018. As of June 30, 2018, and December 31, 2017, the principal was $4,349. This note was acquired by Arch Investments, LLC.

On July 28, 2016, DEPT-UK entered into a business loan with HSBC. The loan is a development loan drawn down against development invoices. The loan is for four years, with an interest rate of 4.5% over the Bank of England base rate. The loan repayment is monthly, interest-only payments for the first six months followed by monthly repayments of principal and interest over the remaining forty-two months. The loan was for $437,992 (£352,500) with an initial $115,767 (£93,178) drawn. The outstanding principal and accrued interest as of June 30, 2018, and December 31, 2017, was $328,608 (£248,824) and $391,981 (£290,294), respectively. As of June 30, 2018, the current portion was $109,536 and the non-current portion was $219,072.

On September 8, 2016, Tapped, prior to being acquired by DEPT-UK, entered into a business loan with HSBC. The loan is for five years, with an interest rate of 5.51%. The loan was for £90,000. The outstanding principal as of June 30, 2018, and December 31, 2017, was $79,010 and $92,312, respectively. As of June 30, 2018, the current portion was $27,251 and the non-current portion was $51,759.

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Related Parties Transactions

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

Related Parties Transactions

NOTE 7 – RELATED PARTIES TRANSACTIONS

For the six months ended June 30, 2018 and May 31, 2017, the Company purchased £59,331 and £88,389, respectively, of cakes from Dee Light, a company which Gill, the vice chairman of the Company, was a 50% shareholder (until November 2016). As of June 30, 2018, and December 31, 2017, the Company owed Dee Light £50,484 and £63,833, respectively.

For the six months ended June 30, 2018 and May 31, 2017, the Company made sales or advances of £246,414 and £202,676, respectively, to The Roastery Department Ltd. (“The Roastery Department”) and made purchases from it of £202,596 and £118,135 for the six months ended June 30, 2018 and May 31, 2017, respectively. As of June 30, 2018, and December 31, 2017, the Company both has receivables and payables from The Roastery Department, which netted as receivables of $479,412 (£363,013) and $421,353 (£312,113), respectively. Gill, the Company’s vice chairman, and Ashley Lopez (“Lopez”), the Company’s chief executive officer, were both unpaid directors of The Roastery Department until they resigned on December 1, 2016. The Company, when purchasing products from The Roastery Department, was provided a discount due to the strategic relationship between the two parties which provided the Company its purchases at cost.

As of June 30, 2018, and December 31, 2017, the Company owed Allesch-Taylor, the Company’s chairman, payables of $54,416 (£41,204) and $36,729 (£29,383), respectively.

As of June 30, 2018, and December 31, 2017, the Company owed Lopez, the Company’s chief executive officer, payables of $878 (£665) and $14,613 (£11,690), respectively.

As of June 30, 2018, and December 31, 2017, the Company owed Deij Capital, a company in which Gill, the deputy chairman of the Company, is the director and owner, notes payable of $11,164 (£8,454) and $11,414 (£8,454), respectively.

The Company has an employment agreement with Lopez, our CEO, and did have a consulting agreement with Clearbrook Capital Partners LLP (“Clearbrook”), an entity where Kazi Shahid, our former CFO, was a partner and also served as CFO. Allesch-Taylor is a director of Clearbrook. The agreement with Clearbrook was terminated on March 15, 2017.

The above related party transactions are not considered as arm’s length transactions for all circumstances.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Stockholders' Equity

NOTE 8 – STOCKHOLDERS’ EQUITY

Common Stock

The Company is authorized to issue up to 250,000,000 shares of common stock. Each outstanding share of common stock entitles the holder to one vote per share on all matters submitted to a stockholder vote. All shares of common stock are non-assessable and non-cumulative, with no pre-emptive rights.

On May 23, 2018, the Company issued 1,932,239 shares of common stock to various third parties as compensation for the acquisition of Bea’s (see Notes 1 and 2). As of June 30, 2018, these shares had not been issued.

As of June 30, 2018, the Company has not granted any stock options and has not recorded any stock-based compensation.

Preference Shares and Non-Controlling Interest

The Articles of Association of DEPT-UK, pursuant to the Companies Act 2006, authorized DEPT-UK to issue up to 25,000,000 preference shares, par value £1.00 per share (such subsidiary preference shares referred to herein as “Preference Shares”). Such Preference Shares have no votes and limited distribution rights. Subject to the provisions of the Companies Act 2006, DEPT-UK shall have the right pursuant to Section 687-688 of the Companies Act 2006 to redeem at par the whole or any part of the Preference Shares at any time or times after the date of issue of the said Preference Shares upon giving to DEPT-UK not less than three months’ previous notice in writing. The Preference Shares, at the discretion of the Board of Director of DEPT-UK, can be purchased at the value they were issued or can be converted into contributed capital. The Preference Shares are accounted for as non-controlling interest. As of June 30, 2018, and December 31, 2017, 4,319,641 and 3,557,796 shares were outstanding, respectively. Of the outstanding shares, 1,603,460 and 1,666,709 were issued to related parties, as of June 30, 2018, and December 31, 2017, respectively.

DEPT-UK has a non-controlling interest of 0.2%. For the six months ended June 30, 2018, the Company had a non-controlling interest of $1,305. For the six months ended May 31, 2017, the Company had a non-controlling interest of $653.

On February 28, 2017, 51,500 Preference Shares were issued to Deij Capital in exchange for a debt of $63,990 (£51,500). See Note 7.

On December 5, 2017, Borough Capital contributed $25,000 (£18,583) to DEPT-UK, in exchange for 18,583 Preference Shares.

On December 14, 2017, Borough Capital contributed $45,000 (£33,488) to the DEPT-UK, in exchange for 33,488 Preference Shares.

On January 17, 2018, Borough Capital, in regards to an October 2017 contribution of $111,061 to DEPT-UK, converted the liability into 79,563 Preference Shares.

During the three months ended June 30, 2018, 682,282 Preference Shares were issued for contributions of $863,120 to DEPT-UK.

Acquisition of Tapped and Packed Ltd

On November 1, 2017, DEPT-UK entered into the Tapped Acquisition Agreement with Tapped, a United Kingdom corporation. See Note 2.

The dollar amount of Preference Shares, as recorded, were recorded to non-controlling interest as part of consolidation.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 9 – COMMITMENTS AND CONTINGENCIES

Legal Matters

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of August 24, 2018, there were no pending or threatened lawsuits.

Lease Commitment

We lease office space in Schaumburg, Illinois, pursuant to a lease that is monthly. This facility serves as our corporate office.

Future minimum lease payments under leases with the various subsidiaries, are as follows:

2018	$	387,567
2019		775,490
2020		778,760
2021		746,502
2022		532,555
Future		1,241,852
Total	$	4,462,726

Note: The above table will change in each future filing due to currency translation as applicable.

DEPT-UK has 18 leases, of which one is for the UK administrative office, and 17 operational leases. The Company has two leases in the United States for DEPT-IL. Various leases have break out dates prior to expiration.

The Company is a primary leaseholder on one lease which it has subleased to the Roastery and is responsible for the monthly payments which approximate £221.

Rent expense for the six months ended June 30, 2018 and May 31, 2017, was $588,477 and $233,373, respectively.

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Concentrations

6 Months Ended

Jun. 30, 2018

Risks and Uncertainties [Abstract]

Concentrations

NOTE 10 – CONCENTRATIONS

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to a concentration of credit risk, consist principally of temporary cash investments.

The Company places its temporary cash investments with financial institutions insured by the Federal Deposit Insurance Corporation (“FDIC”) for the United States and the Financial Services Compensation Scheme (“FSCS”) for the United Kingdom. No amounts exceeded federally insured limits as of June 30, 2018. There have been no losses in these accounts through June 30, 2018.

Concentration of Customer

The Company has one customer, which, for the six months ended June 30, 2018 and May 31, 2017, had sales of $444,833 (£333,191, 11.4% of total revenue) and $349,798 (£274,432, 16.8% of total revenue), respectively. The Company has a contract with the customer that expires in February 2020.

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Revenue Classes

6 Months Ended

Jun. 30, 2018

Revenue Classes

Revenue Classes

NOTE 11 – REVENUE CLASSES

Selected financial information for the Company’s operating revenue classes are as follows:

	For the six months ended				For the six months ended
	June 30, 2018				May 31, 2017
Revenues:
Coffee and complementary food products	$	3,538,442	£	2,651,111	$	1,826,925	£	1,459,928
Coffee school		6,786		5,083		6,906		5,520
Management fees		369,515		276,776		250,218		199,946
Total	$	3,914,743	£	2,932,970	$	2,084,049	£	1,665,394

	For the six months ended				For the six months ended
	June 30, 2018				May 31, 2017
Direct costs of revenue:
Coffee and complementary food products	$	2,819,984	£	2,116,349	$	1,554,987	£	1,223,067
Coffee school		6,108		4,575		5,558		4,429
Management fees		113,035		84,666		58,529		46,138
Total	$	2,939,127	£	2,205,590	$	1,619,074	£	1,273,634

The acquisition of Tapped, effective November 1, 2017, is reflective in 2018 for the six months. The acquisition of Bea’s, Tradewind and Roasted Ritual in May 2018, June 2018 and June 2018, respectively, are not significant.

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Capital Lease Obligations

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Capital Lease Obligations

NOTE 12 – CAPITAL LEASE OBLIGATIONS

The Company leases various assets under capital lease. As of June 30, 2018, and December 31, 2017, capital lease obligations consisted of the following:

	June 30, 2018		December 31, 2017
Computer equipment	$	66,429	$	66,429
Office equipment		45,276		23,609
Site equipment and machinery		492,547		457,134
Site fit out costs		1,799,750		1,799,750
Site furniture, fixtures and fittings		468,037		268,796
Total fixed assets		2,872,039		2,615,718
Less: Accumulated depreciation		1,155,123		858,322
Fixed assets, net	$	1,716,916	$	1,757,396

Aggregate future minimum rentals under capital leases are as follows:

2018	$	94,568
2019		168,035
2020		135,040
2021		86,622
2022		13,875
Future		2,753
Total		500,893
Less: Interest		23,142
Present value of minimum lease payments		477,751
Less: Current portion of capital lease obligations		172,348
Capital lease obligations, net of current portion	$	305,403

Note: The above schedule reflects only items that have payments associated with them.

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Subsequent Events

6 Months Ended

Jun. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

NOTE 13 – SUBSEQUENT EVENTS

Management has reviewed and evaluated subsequent events through the date on which the current financial statements were available to be issued and did not have any material recognizable subsequent events after June 30, 2018.

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Nature of Business and Presentation (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Organization

Organization

DOCASA, Inc. (the “Company,” “we,” “us,” “our,” or “DOCASA”) was incorporated in the State of Nevada on July 22, 2014, under the name of FWF Holdings, Inc. The Company changed its name on August 4, 2016. The Company was originally engaged in the business of commercial production and distribution of hot sauce (see Note 3). On August 4, 2016, the Company changed its year end from July 31 to August 31.

On July 8, 2016, the Company experienced a change in control. Atlantik LP (“Atlantik”), a related party, acquired a majority of the issued and outstanding common stock of the Company in accordance with a stock purchase agreement by and between Atlantik and Nami Shams (the “Seller”). On the closing date, July 8, 2016, pursuant to the terms of the stock purchase agreement, Atlantik purchased from the Seller 115,000,000 shares of the Company’s outstanding restricted common stock for $200,000, representing 75.8% of the Company’s outstanding common stock at that time.

On September 1, 2016, the Company acquired 99.8% of the voting stock of the Department of Coffee and Social Affairs Limited, a United Kingdom corporation (the “DEPT-UK”), and the Company agreed to issue DEPT-UK’s majority shareholder 170,000,000 shares of the Company’s common stock—110,000,000 shares initially and 60,000,000 shares at a time determined by the Company’s Board of Directors but no later than August 31, 2017, which deadline was subsequently extended to August 31, 2019. Also, on September 1, 2016, the Company acquired 115,000,000 shares of the Company’s common stock from Atlantik in exchange for issuing Atlantik a promissory note for $320,000, which shares were then cancelled, and which note has since been paid in full. As a result of the acquisition and the issuance of the initial 110,000,000 shares of common stock, and the cancellation of the 115,000,000 Atlantik shares, DEPT-UK is now the majority-owned subsidiary of the Company, and the Company experienced a change of control.

DEPT-UK formed a wholly-owned subsidiary, Department of Coffee and Internal Affairs Limited (“DCIA”), on September 11, 2014, as filed with the Registrar of Companies for England and Wales. As of June 30, 2018, DCIA has had no operations or activity.

On April 5, 2017, the Company formed Department of Coffee and Social Affairs IL, Inc. (“DEPT-IL”), an Illinois corporation.

On May 18, 2017, the Company formed Department of Coffee and Social Affairs White Space Limited (“DEPT-UKWS”), as filed with the Registrar of Companies for England and Wales. DEPT-UKWS is a subsidiary of DEPT-UK.

For financial reporting purposes, the acquisition of DEPT-UK and the change of control in connection with acquisition represented a “reverse merger” rather than a business combination, and DEPT-UK is deemed to be the accounting acquirer in the transaction. For the periods subsequent to August 31, 2016, the acquisition is being accounted for as a reverse-merger and recapitalization. DEPT-UK is the acquirer for financial reporting purposes, and the Company (DOCASA, Inc., f/k/a FWF Holdings, Inc.) is the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the acquisition are those of DEPT-UK and have been recorded at the historical cost basis of DEPT-UK, and the financial statements after completion of the acquisition include the assets and liabilities of both the Company and DEPT-UK, and the historical operations of DEPT-UK prior to closing and operations of both companies from the closing of the acquisition.

On January 2, 2018, with an effective date of November 1, 2017, DEPT-UK acquired Tapped and Packed Ltd (“Tapped”), an UK company, for a combination of cash and shares of common stock of the Company. See Note 2. Tapped became a subsidiary of DEPT-UK as a result of the transaction. Tapped has four shop locations in the UK which serve coffee and food.

On February 23, 2018, the Board of Directors determined to change the Company’s fiscal year end to December 31 from August 31. The Company believes this change will benefit the Company by aligning its reporting periods to be more consistent with peer coffee companies.

On May 23, 2018, DEPT-UK acquired Bea’s of Bloomsbury Limited (“Bea’s”), an UK company, for shares of common stock of the Company. See Note 2. Bea’s became a subsidiary of DEPT-UK as a result of the transaction. Bea’s has five shop locations in the UK which serves coffee and food.

On June 29, 2018, DEPT-UK acquired Tradewind Espresso Ltd (“Tradewind”), an UK company, for cash. See Note 2. Tradewind became a subsidiary of DEPT-UK as a result of the transaction. Tradewind has one shop location in the UK which serves coffee and food.

On June 29, 2018, DEPT-UK acquired Roasted Rituals Coffee Ltd (“Roasted Rituals”), an UK company, for cash. See Note 2. Roasted Rituals became a subsidiary of DEPT-UK as a result of the transaction. Roasted Rituals is a specialty coffee roaster and has one location in the UK.

Nature of Operations

Nature of Operations

We are in the specialty coffee industry, specifically with company-operated stores. The Company will generate revenue through sales at nineteen existing company-operated coffee shop locations in the UK, with seven more locations under construction. Similar to other leading operators, we sell our proprietary coffee and related products, and complementary food and snacks.

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of DOCASA and its subsidiaries, DEPT-UK, DCIA, DEPT-IL and DEPT-UK’s subsidiaries, Tapped, Bea’s, Roasted Rituals, Tradewind, and DEPT-UKWS. All significant inter-company balances and transactions have been eliminated in consolidation.

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated condensed financial statements of DOCASA have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and done under §240.13(a) of the Securities Act. The results of operations for the interim period ended June 30, 2018 shown in this report are not necessarily indicative of results to be expected for the full fiscal year ending December 31, 2018. In the opinion of the Company’s management, the information contained herein reflects all adjustments (consisting of normal recurring adjustments, unless otherwise indicated) necessary for a fair presentation of the Company’s results of operations, financial position and cash flows. The unaudited interim financial statements should be read in conjunction with the audited financial statements in the Company’s Form 10-K for the year ended August 31, 2017, filed on December 18, 2017 and Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities 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. Actual results could differ from those estimates. Significant estimates in the accompanying financial statements include the amortization period for intangible assets, valuation and impairment valuation of intangible assets, allowance for accounts receivable, estimated lives of intangible and fixed assets, and valuation of share-based payments.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Accounts Receivable

Accounts Receivable

Accounts receivable consisted of amounts due from customers primarily for management fees. The Company considered accounts more than 30 days old to be past due. The Company used the allowance method for recognizing bad debts. When an account was deemed uncollectible, it was written off against the allowance. The Company generally does not require collateral for its accounts receivable. Management has not recorded an allowance for doubtful accounts as of June 30, 2018 or December 31, 2017.

Inventory

Inventory

Inventory is recorded at the lower of cost or market and the cost of sales are recorded utilizing the first in first out (“FIFO”) method.

Fixed Assets

Fixed Assets

Property and equipment are recorded at cost. Depreciation is computed using the straight-line method based on the estimated useful lives of the related assets of three years for computer equipment, five years for office furniture and fixtures, and the lesser of the lease term or the useful life of the leased equipment. Leasehold improvements are amortized over the lesser of the lease term or the useful life of the improvements. Expenditures for maintenance and repairs along with fixed assets below our capitalization threshold are expensed as incurred.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company accounts for long-lived assets in accordance with the provisions of Statement of Financial Accounting Standards ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets.” This statement requires that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company measures its financial assets and liabilities in accordance with generally accepted accounting principles. For certain of our financial instruments, including cash, accounts receivable, accounts payable and accrued expenses, the carrying amounts approximate fair value due to their short maturities.

We follow accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

Revenue Recognition

Revenue Recognition

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This update provides a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. We have adopted this update. We do not believe this guidance will impact the recognition of our primary source of revenue from company-owned coffee shops. The adoption of this guidance did not have a material impact on our consolidated financial statements.

Stock-Based Compensation

Stock-Based Compensation

The Company accounts for stock-based instruments issued to employees in accordance with ASC Topic 718. ASC Topic 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company accounts for non-employee share-based awards in accordance with the measurement and recognition provisions ASC Topic 505-50. The Company estimates the fair value of stock options at the grant date by using the Black-Scholes option-pricing model.

Advertising

Advertising

Advertising is expensed as incurred and is included in other general and administrative expenses on the accompanying condensed consolidated statement of operations. For the six months ended June 30, 2018 and May 31, 2017 advertising expense was $8,068 and $23,171, respectively.

Income Taxes

Income Taxes

The Company adopted the provisions of ASC 740, “Income Taxes.” When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying condensed consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of June 30, 2018, tax years 2014 - 2017 remain open for IRS audit and tax years 2015–2017 remain open for HM Revenue & Customs (“HMRC”) audit. The Company has received no notice of audit from the IRS or HMRC for any of the open tax years.

Net Earnings (Loss) Per Share

Net Earnings (Loss) Per Share

In accordance with ASC 260-10, “Earnings Per Share,” basic net earnings (loss) per common share is computed by dividing the net earnings (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted average number of common stock shares outstanding during the period. The Company does not currently have any potential dilutive securities outstanding as of June 30, 2018 and May 31, 2017.

Foreign Currency Translation and Transactions

Foreign Currency Translation and Transactions

The British Pound (“£”) is the functional currency of DEPT-UK and Tapped whereas the financial statements are reported in United States Dollar (“USD,” “$”). Assets and liabilities are translated based on the exchange rates at the condensed consolidated balance sheet date, while revenue and expense accounts are translated at the average exchange rates prevailing during the period. Equity accounts are translated at historical exchange rates. The resulting translation gain and loss adjustments are accumulated as a component of stockholders’ equity and other comprehensive loss.

Comprehensive Loss

Comprehensive Loss

The Company reports comprehensive loss and its components in its consolidated financial statements. Comprehensive loss consists of net loss on foreign currency translation adjustments affecting stockholders’ equity that, under U.S. GAAP, are excluded from net loss. As of June 30, 2018, the exchange rate between U.S. Dollars and British Pounds was US$1.32 = £1.00, and the weighted average exchange rate for the six months ended June 30, 2018 was US$1.34 = £1.00. As of December 31, 2017, the exchange rate between U.S. Dollars and British Pounds was US$1.35 = £1.00.

Going Concern

Going Concern

The Company had net loss attributable to common shareholders for the six months ended June 30, 2018 of $939,467 and a working capital deficit as of June 30, 2018 of $2,047,845, and has cash provided by operations of $85,774 for the six months ended June 30, 2018. In addition, as of June 30, 2018, the Company had a stockholders’ deficit and accumulated deficit of $1,399,902 and $3,422,375, respectively. Without further funding, these conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The ability of the Company to continue its operations is dependent on the execution of management’s plans, which include the raising of capital through the debt and/or equity markets, until such time that funds provided by operations are sufficient to fund working capital requirements. If the Company were not to continue as a going concern, it would likely not be able to realize its assets at values comparable to the carrying value or the fair value estimates reflected in the balances set out in the preparation of the financial statements.

There can be no assurances that the Company will be successful in generating additional cash from the equity/debt markets or other sources to be used for operations. The financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary. Based on the Company’s current resources, the Company will not be able to continue to operate without additional immediate funding. Should the Company not be successful in obtaining the necessary financing to fund its operations, the Company would need to curtail certain or all operational activities and/or contemplate the sale of its assets, if necessary.

Effect of Recent Accounting Pronouncements

Effect of Recent Accounting Pronouncements

The Company reviews new accounting standards and updates as issued. No new standards or updates had any material effect on these financial statements. The accounting pronouncements and updates issued subsequent to the date of these financial statements that were considered significant by management were evaluated for the potential effect on these financial statements. Management does believe that some of the subsequent pronouncements will have a material effect on these financial statements as presented and does not anticipate the need for any future restatement of these financial statements because of the retro-active application of any accounting pronouncements issued subsequent to June 30, 2018 through the date these financial statements were issued.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued an ASU on lease accounting. The ASU requires the lease rights and obligations arising from lease contracts, including existing and new arrangements, to be recognized as assets and liabilities on the balance sheet. The ASU is effective for reporting periods beginning after December 15, 2018 with early adoption permitted. While the Company is still evaluating the ASU, the Company expects the adoption of the ASU to have a material effect on the Company’s financial condition due to the recognition of the lease rights and obligations as assets and liabilities. The Company expects the ASU to have a material effect on the Company’s results of operations and financial position, and the ASU will have no effect on cash flows.

ASU 2014-09, Revenue – Revenue from Contracts with Customers. In May 2014, the FASB issued a new accounting standard that requires recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. The FASB has also issued several updates to ASU 2014-09. The new standard supersedes U.S. GAAP guidance on revenue recognition and requires the use of more estimates and judgments than the present standards. It also requires additional disclosures. We adopted the new revenue guidance effective January 1, 2017, by recognizing the cumulative effect of initially applying the new standard as an increase to the opening balance of retained earnings. The effect of the adoption was immaterial, with an immaterial impact to our net income on an ongoing basis. Adoption of the new standard will also result in changes in classification between Revenues and Direct costs of revenue.

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Acquisitions (Tables)

6 Months Ended

Jun. 30, 2018

Business Combinations [Abstract]

Schedule of Fair Values of the Assets and Liabilities Assumed at the Acquisition Date

The following table summarizes the consideration given for DEPT-UK and the provisional fair values of the assets and liabilities assumed at the acquisition date.

Consideration given:
Cash given	$	237,877
Common stock shares given		1,918,125
Total consideration given	$	2,156,002
Fair value of identifiable assets acquired, and liabilities assumed:
Cash	$	200,582
Prepaid expense		92,052
Inventory		51,411
Fixed assets, net		73,337
Deposits		119,999
Accrued expenses		(195,621	)
Short-term note payable		(200,804	)
Director note		(168,782	)
Deferred taxes		(1,184	)
Total identifiable net liabilities		(29,010	)
Goodwill		2,185,012
Total consideration	$	2,156,002

The following table summarizes the consideration given by DEPT-UK and the provisional fair values of the assets and liabilities assumed at the acquisition date.

Consideration given:
Common stock shares given	$	1,623,921
Total consideration given	$	1,623,921
Fair value of identifiable assets acquired, and liabilities assumed:
Prepaid expense	$	86,764
Inventory		36,311
Fixed assets, net		315,558
Deposits		54,357
Accounts payable		(250,365	)
Accrued expenses		(271,096	)
Short-term note payable		(45,931	)
Total identifiable net liabilities		(74,400	)
Goodwill		1,698,321
Total consideration	$	1,623,921

The following table summarizes the consideration given for DEPT-UK and the provisional fair values of the assets and liabilities assumed at the acquisition date.

Consideration given:
Cash given	$	49,096
Accrued consideration		180,020
Total consideration given	$	229,116
Fair value of identifiable assets acquired, and liabilities assumed:
Cash	$	27,078
Accounts receivable, net		11,350
Fixed assets, net		11,344
Accrued expenses		(2,249	)
Total identifiable net assets		47,523
Goodwill		181,593
Total consideration	$	229,116

The following table summarizes the consideration given by DEPT-UK and the provisional fair values of the assets and liabilities assumed at the acquisition date.

Consideration given:
Cash given	$	49,096
Accrued consideration		180,020
Total consideration given	$	229,116
Fair value of identifiable assets acquired, and liabilities assumed:
Cash	$	31,569
Accounts receivable, net		473
Fixed assets, net		13,308
Accrued expenses		(13,799	)
Total identifiable net assets		31,551
Goodwill		197,565
Total consideration	$	229,116

Schedule of Pro-forma Financial Information

The pro-forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place on September 1, 2016.

	For the Six Months Ended June 30, 2018
										Roasted						Pro-forma
	DOCASA			Tapped			Bea’s			Rituals			Tradewind			Adjustments		Combined
Revenue, net	$	2,692,461		$	1,056,081		$	1,022,579		$	63,790		$	186,961		$	-	$	5,021,873
Operating expenses		4,642,058			1,112,806			1,223,736			66,380			204,933			-		7,249,913
Loss from operations		(1,949,597	)		(56,725	)		(201,156	)		(2,590	)		(17,972	)		-		(2,228,040	)
Other income (expense)		(11,297	)		-			-			-			-			-		(11,297	)
Loss before income taxes		(1,960,894	)		(56,725	)		(201,156	)		(2,590	)		(17,972	)		-		(2,239,337	)
Net Loss attributable to common shareholders	$	(1,960,894	)	$	(56,725	)	$	(201,156	)	$	(2,590	)	$	(17,972	)	$	-	$	(2,239,337	)
Net income (loss) per common share - basic	$	(0.01	)															$	(0.01	)
Weighted average number of common shares outstanding during the period - basic		151,143,287																	151,143,287

	For the Six Months Ended May 31, 2017
	DOCASA			Tapped		Bea’s (a)		Roasted Rituals		Tradewind			Pro-forma Adjustments		Combined
Revenue, net	$	1,100,939		$	983,110	$	-	$	81,233	$	186,420		$	-	$	2,351,702
Operating expenses		1,722,031			696,770		-		55,559		195,201			-		2,669,561
Income (loss) from operations		(621,092	)		286,340		-		25,674		(8,781	)		-		(317,859	)
Other income (expense)		(9,858	)		-		-		-		-			-		(9,858	)
Income (loss) before income taxes		(630,950	)		286,340		-		25,674		(8,781	)		-		(327,717	)
Net income (loss) attributable to common shareholders	$	(630,950	)	$	286,340	$	-	$	25,674	$	(8,781	)	$	-	$	(327,717	)
Net loss per common share - basic	$	(0.00	)												$	(0.00	)
Weighted average number of common shares outstanding during the period - basic		146,800,000														146,800,000

(a) Historical financial statements unavailable.

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Inventory (Tables)

6 Months Ended

Jun. 30, 2018

Inventory Disclosure [Abstract]

Schedule of Inventory

The inventory is as follows:

	June 30, 2018		December 31, 2017
Consumable products	$	37,402	$	37,750
Cold brew		12,761		7,119
Retail products		36,820		18,725
Food and drinks		51,777		36,792
Total inventory	$	138,760	$	100,386

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Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

Balance, December 31, 2017	$	2,185,012
Acquisitions		2,077,480
Balance, June 30, 2018	$	4,262,492

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Notes Payable (Tables)

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Schedule of Notes Payable

Notes payable - current

	June 30, 2018						December 31, 2017
			Accrued						Accrued
	Principal		Interest		Total		Principal		Interest		Total
Arch Investments	$	2,194	$	-	$	2,194	$	2,194	$	-	$	2,194
Arch Investments		5,067		-		5,067		5,067		-		5,067
Arch Investments		5,065		-		5,065		5,065		-		5,065
Arch Investments		15,873		-		15,873		15,873		-		15,873
Arch Investments		4,349		-		4,349		4,349		-		4,349
HSBC		109,536		-		109,536		111,970		-		111,970
HSBC		27,251		-		27,251		26,642		-		26,642
Total	$	169,335	$	-	$	169,335	$	171,160	$	-	$	171,160

Notes payable - non-current

	June 30, 2018						December 31, 2017
			Accrued						Accrued
	Principal		Interest		Total		Principal		Interest		Total
Deij Capital Limited (1)	$	11,164	$	-	$	11,164	$	11,414	$	-	$	11,414
HSBC		219,072		-		219,072		280,011		-		280,011
HSBC		51,759		-		51,759		65,670		-		65,670
Total	$	281,995	$	-	$	281,995	$	357,095	$	-	$	357,095

(1) Related party

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Lease Payments

Future minimum lease payments under leases with the various subsidiaries, are as follows:

2018	$	387,567
2019		775,490
2020		778,760
2021		746,502
2022		532,555
Future		1,241,852
Total	$	4,462,726

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Revenue Classes (Tables)

6 Months Ended

Jun. 30, 2018

Revenue Classes

Schedule of Operating Revenue Classes

Selected financial information for the Company’s operating revenue classes are as follows:

	For the six months ended				For the six months ended
	June 30, 2018				May 31, 2017
Revenues:
Coffee and complementary food products	$	3,538,442	£	2,651,111	$	1,826,925	£	1,459,928
Coffee school		6,786		5,083		6,906		5,520
Management fees		369,515		276,776		250,218		199,946
Total	$	3,914,743	£	2,932,970	$	2,084,049	£	1,665,394

	For the six months ended				For the six months ended
	June 30, 2018				May 31, 2017
Direct costs of revenue:
Coffee and complementary food products	$	2,819,984	£	2,116,349	$	1,554,987	£	1,223,067
Coffee school		6,108		4,575		5,558		4,429
Management fees		113,035		84,666		58,529		46,138
Total	$	2,939,127	£	2,205,590	$	1,619,074	£	1,273,634

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Capital Lease Obligations (Tables)

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Schedule of Capital Lease Obligations

The Company leases various assets under capital lease. As of June 30, 2018, and December 31, 2017, capital lease obligations consisted of the following:

	June 30, 2018		December 31, 2017
Computer equipment	$	66,429	$	66,429
Office equipment		45,276		23,609
Site equipment and machinery		492,547		457,134
Site fit out costs		1,799,750		1,799,750
Site furniture, fixtures and fittings		468,037		268,796
Total fixed assets		2,872,039		2,615,718
Less: Accumulated depreciation		1,155,123		858,322
Fixed assets, net	$	1,716,916	$	1,757,396

Schedule of Capital Lease Obligations Future Minimum Payment

Aggregate future minimum rentals under capital leases are as follows:

2018	$	94,568
2019		168,035
2020		135,040
2021		86,622
2022		13,875
Future		2,753
Total		500,893
Less: Interest		23,142
Present value of minimum lease payments		477,751
Less: Current portion of capital lease obligations		172,348
Capital lease obligations, net of current portion	$	305,403

XML

Nature of Business and Presentation (Details Narrative) - USD ($)			3 Months Ended		6 Months Ended
	Sep. 01, 2016	Jul. 08, 2016	Jun. 30, 2018	May 31, 2017	Jun. 30, 2018	May 31, 2017	Dec. 31, 2017
State of incorporation					Nevada
Date of incorporation					Jul. 22, 2014
Restricted common stock, shares		115,000,000
Restricted common stock, value		$ 200,000
Restricted common stock percentage of total shares		75.80%
Number of common shares issued in exchange for promissory note	115,000,000
Number of common shares issued in exchange for promissory note, value	$ 320,000
Advertising expense					$ 8,068	$ 23,171
Exchange rate					The exchange rate between U.S. Dollars and British Pounds was US$1.32 = £1.00, and the weighted average exchange rate for the six months ended June 30, 2018 was US$1.34 = £1.00. As of December 31, 2017, the exchange rate between U.S. Dollars and British Pounds was US$1.35 = £1.00
Net income			$ (949,125)	$ (130,981)	$ (939,467)	(345,263)
Working capital deficit			2,047,845		2,047,845
Cash used in operating activities					85,774	$ (265,801)
Shareholders' deficit			(1,399,902)		(1,399,902)		$ (1,818,833)
Accumulated deficit			$ (3,422,375)		$ (3,422,375)		$ (2,482,908)
Computer Equipment [Member]
Estimated useful lives of assets					3 years
Office Equipment [Member]
Estimated useful lives of assets					5 years
Common Stock [Member]
Initially shares			110,000,000		110,000,000
Atlantik Shares [Member]
Shares acquired for cancellation			115,000,000		115,000,000
DEPT UK [Member]
Number of common stock shares issued	170,000,000
DEPT UK [Member] | No Later Than August 31, 2017 [Member]
Number of common stock shares issued	60,000,000
DEPT UK [Member] | Common Stock Initial Shares [Member]
Number of common stock shares issued	110,000,000
Coffee and Social Affairs Limited [Member]
Business acquisition, percentage of voting interests acquired	99.80%

XML

Acquisitions (Details Narrative)			6 Months Ended
	Jun. 29, 2018 GBP (£)	May 23, 2018 USD ($) $ / shares shares	Jun. 30, 2018 USD ($) $ / shares shares	Jun. 30, 2018 GBP (£) shares	Jan. 17, 2018 shares	Dec. 31, 2017 USD ($)	Dec. 14, 2017 shares	Dec. 05, 2017 shares
Preference shares of DEPT-UK issued | shares			682,282		79,563		33,488	18,583
Goodwill			$ 4,262,492			$ 2,185,012
Tapped [Member]
Revenue			1,056,081
Net loss			56,725
Tapped Acquisition Agreement [Member]
Business acquisition consideration transferred, amount			2,156,002
Goodwill			2,185,012
Business acquisition consideration transferred, shares issued value			1,918,125
Bea's Acquisition Agreement [Member]
Business acquisition capital shares acquired by DEPT-UK | shares		1,933,239
Business acquisition consideration transferred, amount			1,623,921
Goodwill			1,698,321
Revenue			166,201
Net loss			31,562
Share issued price per shares | $ / shares		$ 0.84
Business acquisition consideration transferred, shares issued value		$ 1,623,921
Roasted Rituals Acquisition Agreement [Member]
Business acquisition consideration transferred, amount			229,116
Revenue			0
Net loss			$ 1,171
Roasted Rituals Acquisition Agreement [Member] | GBP [Member]
Business acquisition consideration transferred, amount | £	£ 175,000
Goodwill | £	181,593
Roasted Rituals Acquisition Agreement [Member] | GBP [Member] | Tranches [Member]
Business acquisition consideration transferred, amount | £	175,000
Business acquisition closing value | £	37,500
Roasted Rituals Acquisition Agreement [Member] | GBP [Member] | First Anniversary [Member]
Business acquisition consideration transferred, amount | £	62,500
Roasted Rituals Acquisition Agreement [Member] | GBP [Member] | Second Anniversary [Member]
Business acquisition consideration transferred, amount | £	75,000
Richard Lilley [Member] | Tapped Acquisition Agreement [Member]
Business acquisition capital shares acquired by DEPT-UK | shares			100
Allesch-Taylor [Member] | Tapped Acquisition Agreement [Member]
Business acquisition consideration transferred, shares issued | shares			1,546,875	1,546,875
Business acquisition consideration transferred or transferrable, description			Pursuant to the Tapped Acquisition Agreement, Tapped stock was transferred to DEPT-UK on November 1, 2017, in consideration of £175,000 and 1,546,875 shares of common stock of the Company. The £175,000 was paid in October 2017 as a prepayment to the completion date of November 1, 2017. Stefan Allesch-Taylor (“Allesch-Taylor”), Chairman of the Company, utilized his personally owned shares of common stock of the Company, and assigned the 1,546,875 shares (the “Allesch-Taylor Shares”) from his ownership to Lilley. In exchange for the use of the Allesch-Taylor Shares, which were provisionally valued at $1,918,125 (“Provisional Share Compensation Value”), the Board of Directors issued Allesch-Taylor 1,325,000 Preference Shares of DEPT-UK. The Provisional Share Compensation Value was determined by the previous day’s closing price of $1.24 per share.	Pursuant to the Tapped Acquisition Agreement, Tapped stock was transferred to DEPT-UK on November 1, 2017, in consideration of £175,000 and 1,546,875 shares of common stock of the Company. The £175,000 was paid in October 2017 as a prepayment to the completion date of November 1, 2017. Stefan Allesch-Taylor (“Allesch-Taylor”), Chairman of the Company, utilized his personally owned shares of common stock of the Company, and assigned the 1,546,875 shares (the “Allesch-Taylor Shares”) from his ownership to Lilley. In exchange for the use of the Allesch-Taylor Shares, which were provisionally valued at $1,918,125 (“Provisional Share Compensation Value”), the Board of Directors issued Allesch-Taylor 1,325,000 Preference Shares of DEPT-UK. The Provisional Share Compensation Value was determined by the previous day’s closing price of $1.24 per share.
Provisional share compensation value			$ 1,918,125
Preference shares of DEPT-UK issued | shares			1,325,000
Share price used to determine provisional share compensation value | $ / shares			$ 1.24
Allesch-Taylor [Member] | Tapped Acquisition Agreement [Member] | GBP [Member]
Business acquisition consideration transferred, amount | £				£ 175,000
Tradewind Espresso Ltd Member | Roasted Rituals Acquisition Agreement [Member]
Business acquisition consideration transferred, amount			$ 229,116
Revenue			0
Net loss			$ 3,226
Tradewind Espresso Ltd Member | Roasted Rituals Acquisition Agreement [Member] | GBP [Member]
Business acquisition consideration transferred, amount | £	175,000
Goodwill | £	181,593
Tradewind Espresso Ltd Member | Roasted Rituals Acquisition Agreement [Member] | GBP [Member] | Tranches [Member]
Business acquisition consideration transferred, amount | £	175,000
Business acquisition closing value | £	37,500
Tradewind Espresso Ltd Member | Roasted Rituals Acquisition Agreement [Member] | GBP [Member] | First Anniversary [Member]
Business acquisition consideration transferred, amount | £	62,500
Tradewind Espresso Ltd Member | Roasted Rituals Acquisition Agreement [Member] | GBP [Member] | Second Anniversary [Member]
Business acquisition consideration transferred, amount | £	£ 75,000

XML

Acquisitions - Schedule of Fair Values of the Assets and Liabilities Assumed at the Acquisition Date (Details) - USD ($)		6 Months Ended
	May 23, 2018	Jun. 30, 2018	Dec. 31, 2017
Goodwill		$ 4,262,492	$ 2,185,012
Tapped Acquisition Agreement [Member]
Cash given		237,877
Common stock given		1,918,125
Total consideration given		2,156,002
Cash		200,582
Prepaid expense		92,052
Inventory		51,411
Fixed assets, net		73,337
Deposits		119,999
Accrued expenses		(195,621)
Short-term note payable		(200,804)
Director note		(168,782)
Deferred taxes		(1,184)
Total identifiable net liabilities		(29,010)
Goodwill		2,185,012
Total consideration		2,156,002
Bea's Acquisition Agreement [Member]
Cash given		1,623,921
Common stock given	$ 1,623,921
Total consideration given		1,623,921
Prepaid expense		86,764
Inventory		36,311
Fixed assets, net		315,558
Deposits		54,357
Accounts payable		(250,365)
Accrued expenses		(271,096)
Short-term note payable		(45,931)
Total identifiable net liabilities		(74,400)
Goodwill		1,698,321
Total consideration		1,623,921
Roasted Rituals Acquisition Agreement [Member]
Cash given		49,096
Accrued consideration		180,020
Total consideration given		229,116
Cash		27,078
Accounts receivable, net		11,350
Fixed assets, net		11,344
Accrued expenses		(2,249)
Total identifiable net liabilities		47,523
Goodwill		181,593
Total consideration		229,116
Roasted Rituals Acquisition Agreement [Member] | Tradewind Espresso Ltd Member
Cash given		49,096
Accrued consideration		180,020
Total consideration given		229,116
Cash		31,569
Accounts receivable, net		473
Fixed assets, net		13,308
Accrued expenses		(13,799)
Total identifiable net liabilities		31,551
Goodwill		197,565
Total consideration		$ 229,116

XML

Acquisitions - Schedule of Pro-forma Financial Information (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	May 31, 2017
Revenue, net	$ 5,021,873	$ 2,351,702
Operating expenses	7,249,913	2,669,561
Loss from operations	(2,228,040)	(317,859)
Other income (expense)	(11,297)	(9,858)
Income (loss) before income taxes	(2,239,337)	(327,717)
Net income (loss) attributable to common shareholders	$ (2,239,337)	$ (327,717)
Net income (loss) per common share - basic	$ (0.01)	$ (0.00)
Weighted average number of common shares outstanding during the period - basic	151,143,287	146,800,000
Pro-forma Adjustments [Member]
Revenue, net
Operating expenses
Loss from operations
Other income (expense)
Income (loss) before income taxes
Net income (loss) attributable to common shareholders
DOCASA [Member]
Revenue, net	2,692,461	1,100,939
Operating expenses	4,642,058	1,722,031
Loss from operations	(1,949,597)	(621,092)
Other income (expense)	(11,297)	(9,858)
Income (loss) before income taxes	(1,960,894)	(630,950)
Net income (loss) attributable to common shareholders	$ (1,960,894)	$ (630,950)
Net income (loss) per common share - basic	$ (0.01)	$ (0.00)
Weighted average number of common shares outstanding during the period - basic	151,143,287	146,800,000
Tapped [Member]
Revenue, net	$ 1,056,081	$ 983,110
Operating expenses	1,112,806	696,770
Loss from operations	(56,725)	286,340
Other income (expense)
Income (loss) before income taxes	(56,725)	286,340
Net income (loss) attributable to common shareholders	(56,725)	286,340
Bea's [Member]
Revenue, net	1,022,579		[1]
Operating expenses	1,223,736		[1]
Loss from operations	(201,156)		[1]
Other income (expense)			[1]
Income (loss) before income taxes	(201,156)		[1]
Net income (loss) attributable to common shareholders	(201,156)		[1]
Roasted Rituals [Member]
Revenue, net	63,790	81,233
Operating expenses	66,380	55,559
Loss from operations	(2,590)	25,674
Other income (expense)
Income (loss) before income taxes	(2,590)	25,674
Net income (loss) attributable to common shareholders	(2,590)	25,674
Tradewind Espresso Ltd Member
Revenue, net	186,961	186,420
Operating expenses	204,933	195,201
Loss from operations	(17,972)	(8,781)
Other income (expense)
Income (loss) before income taxes	(17,972)	(8,781)
Net income (loss) attributable to common shareholders	$ (17,972)	$ (8,781)

[1] Historical financial statements unavailable.

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Inventory (Details Narrative) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Inventory	$ 138,760	$ 100,386

XML

Inventory - Schedule of Inventory (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Inventory	$ 138,760	$ 100,386
Consumable Products [Member]
Inventory	37,402	37,750
Cold Brew [Member]
Inventory	12,761	7,119
Retail Products [Member]
Inventory	36,820	18,725
Food and Drinks [Member]
Inventory	$ 51,777	$ 36,792

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Fixed Assets (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2018	May 31, 2017
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 170,565	$ 90,330

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Intangible Assets (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2018	May 31, 2017	Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 2,801	$ 3,524
Goodwill	$ 4,262,492		$ 2,185,012

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Intangible Assets - Schedule of Goodwill (Details)	6 Months Ended
	Jun. 30, 2018 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Balance, beginning	$ 2,185,012
Acquisitions	2,077,480
Balance, ending	$ 4,262,492

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Notes Payable (Details Narrative)								1 Months Ended
	May 31, 2017 USD ($) shares	May 31, 2017 GBP (£) shares	Sep. 08, 2016 GBP (£)	Sep. 01, 2016 USD ($) shares	Jun. 30, 2016 USD ($) shares	Jun. 30, 2016 GBP (£) shares	Jul. 01, 2014 USD ($)	Jul. 28, 2016 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 GBP (£)	Dec. 31, 2017 USD ($)	Dec. 31, 2017 GBP (£)	Jul. 28, 2016 GBP (£)	Jan. 31, 2016 USD ($)	Oct. 31, 2015 USD ($)	Jul. 31, 2015 USD ($)	Apr. 30, 2015 USD ($)	Jul. 31, 2014 USD ($)	Jul. 01, 2014 GBP (£)
Note payable balance due converted into shares, value				$ 320,000
Note payable balance due converted into shares | shares				115,000,000
Notes payable - current									$ 169,335		$ 171,160
Accrued interest
Notes payable - non current									281,995		357,095
DEPT-UK [Member]
Notes payable - current									109,536
Notes payable - non current									219,072
HSBC [Member]
Debt Instrument, Term			5 years					4 years
Interest rate			5.51%					4.50%
Debt amount								$ 437,992	328,608		391,981
Initially drawn								$ 115,767
HSBC [Member] | DEPT-UK [Member]
Debt amount									79,010		92,312
Notes payable - current									27,251
Notes payable - non current									51,759
Nami Shams [Member] | Promissory Note One [Member]
Debt amount									2,194		2,194							$ 2,194
Nami Shams [Member] | Promissory Note Two [Member]
Debt amount									5,067		5,067						$ 5,067
Nami Shams [Member] | Promissory Note Three [Member]
Debt amount									5,065		5,065					$ 5,065
Nami Shams [Member] | Promissory Note Four [Member]
Debt amount									15,873		15,873				$ 15,873
Nami Shams [Member] | Promissory Note Five [Member]
Debt amount									4,349		4,349			$ 4,349
GBP [Member] | HSBC [Member]
Debt amount | £			£ 90,000							£ 248,824		£ 290,294	£ 352,500
Initially drawn | £													£ 93,178
Deij Capital [Member]
Debt Instrument, Term							3 years
Interest rate							0.00%
Debt amount							$ 171,437
Notes payable - current									11,164		11,414
Accrued interest									$ 0		$ 0
Deij Capital [Member] | Preferred Stock [Member]
Note payable balance due converted into shares, value	$ 63,990				$ 179,534
Note payable balance due converted into shares | shares	51,500	51,500			135,464	135,464
Deij Capital [Member] | GBP [Member]
Debt amount | £																			£ 100,000
Note payable balance due converted into shares, value | £						£ 135,464
Notes payable - current | £										8,454		8,454
Accrued interest | £										£ 0		£ 0
Deij Capital [Member] | GBP [Member] | Preferred Stock [Member]
Note payable balance due converted into shares, value | £		£ 51,500

XML

Notes Payable - Schedule of Notes Payable (Details) - USD ($)		Jun. 30, 2018	Dec. 31, 2017
Principal, current		$ 169,335	$ 171,160
Accrued Interest, current
Total, current		169,335	171,160
Principal, non-current		281,995	357,095
Accrued Interest, non-current
Total, non-current		281,995	357,095
Arch Investments One [Member]
Principal, current		2,194	2,194
Accrued Interest, current
Total, current		2,194	2,194
Arch Investments Two [Member]
Principal, current		5,067	5,067
Accrued Interest, current
Total, current		5,067	5,067
Arch Investments Three [Member]
Principal, current		5,065	5,065
Accrued Interest, current
Total, current		5,065	5,065
Arch Investments Four [Member]
Principal, current		15,873	15,873
Accrued Interest, current
Total, current		15,873	15,873
Arch Investments Five [Member]
Principal, current		4,349	4,349
Accrued Interest, current
Total, current		4,349	4,349
HSBC One [Member]
Principal, current		109,536	111,970
Accrued Interest, current
Total, current		109,536	111,970
Principal, non-current		219,072	280,011
Accrued Interest, non-current
Total, non-current		219,072	280,011
HSBC Two [Member]
Principal, current		27,251	26,642
Accrued Interest, current
Total, current		27,251	26,642
Principal, non-current		51,759	65,670
Accrued Interest, non-current
Total, non-current		51,759	65,670
Deij Capital [Member]
Principal, non-current	[1]	11,164	11,414
Accrued Interest, non-current	[1]
Total, non-current	[1]	$ 11,164	$ 11,414

[1] Related party

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Related Parties Transactions (Details Narrative)	6 Months Ended
	Jun. 30, 2018 GBP (£)	May 31, 2017 USD ($)	May 31, 2017 GBP (£)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 GBP (£)	Dec. 31, 2017 USD ($)	Dec. 31, 2017 GBP (£)
Allesch-Taylor [Member]
Due to related party | $				$ 54,416		$ 36,729
Lopez [Member]
Due to related party | $				$ 878		14,613
GBP [Member]
Purchases of cakes, value	£ 202,596		£ 118,135
Sales	246,414	$ 202,676
GBP [Member] | Allesch-Taylor [Member]
Due to related party					£ 41,204		£ 29,383
GBP [Member] | Lopez [Member]
Due to related party					£ 665		11,690
GBP [Member] | Dee Light [Member]
Purchases of cakes, value	£ 59,331		£ 88,389
Dee Light [Member]
Ownership percentage				50.00%	50.00%
Dee Light [Member] | GBP [Member]
Payables to related party					£ 50,484		63,833
Roastery Department Ltd [Member]
Receivables to related party | $				$ 479,412		421,353
Roastery Department Ltd [Member] | GBP [Member]
Receivables to related party					363,013		312,113
Deij Capital [Member]
Notes payable | $				$ 11,164		$ 11,414
Deij Capital [Member] | GBP [Member]
Notes payable					£ 8,454		£ 8,454

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Stockholders' Equity (Details Narrative)									6 Months Ended
	May 23, 2018 shares	Jan. 17, 2018 USD ($) shares	Dec. 14, 2017 USD ($) shares	Dec. 14, 2017 GBP (£) shares	Dec. 05, 2017 USD ($) shares	Dec. 05, 2017 GBP (£) shares	Feb. 28, 2017 USD ($) shares	Feb. 28, 2017 GBP (£) shares	Jun. 30, 2018 USD ($) $ / shares shares	May 31, 2017 USD ($)	Dec. 31, 2017 $ / shares shares
Common stock, shares authorized									250,000,000		250,000,000
Outstanding preference shares issued for related party									1,603,460		1,666,709
Non- controlling interest rate									0.20%
Non- controlling interest | $									$ 1,305	$ 653
Proceeds from issuance of preferred stock | $		$ 111,061	$ 45,000		$ 25,000				$ 863,120
Preferred stock, shares issued		79,563	33,488	33,488	18,583	18,583			682,282
DEPT-UK [Member]
Preference shares, shares authorized									25,000,000		25,000,000
Preference shares, par value | $ / shares									$ 1		$ 1
Preference shares, Outstanding									4,319,641		3,557,796
Preferred stock, shares issued									4,319,641		3,557,796
DEPT-UK [Member] | Preferred Stock [Member]
Preference shares, Outstanding									4,319,641		3,557,796
GBP [Member]
Preference shares, par value | $ / shares									$ 1.00
Proceeds from issuance of preferred stock | £				£ 33,488		£ 18,583
Third Parties [Member]
Number of common stock shares issued for acquisitions	1,932,239
Deij Capital [Member]
Preference shares issued to exchange debt, shares							51,500	51,500
Preference shares issued to exchange debt | $							$ 63,990
Deij Capital [Member] | GBP [Member]
Preference shares issued to exchange debt | £								£ 51,500
Maximum [Member]
Common stock, shares authorized									250,000,000
Preference shares, shares authorized									25,000,000

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Commitments and Contingencies (Details Narrative)	6 Months Ended
	Jun. 30, 2018 USD ($)	Jun. 30, 2018 GBP (£)	May 31, 2017 USD ($)
Rent expense | $	$ 588,477		$ 233,373
GBP [Member]
Monthly payment for rent | £		£ 221

XML

Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details)	Jun. 30, 2018 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2018	$ 387,567
2019	775,490
2020	778,760
2021	746,502
2022	532,555
Future	1,241,852
Total	$ 4,462,726

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Concentrations (Details Narrative)	6 Months Ended
	Jun. 30, 2018 USD ($)	Jun. 30, 2018 GBP (£)	May 31, 2017 USD ($)	May 31, 2017 GBP (£)
Sales revenue | $	$ 444,833		$ 349,798
Contract expiry date	Feb. 28, 2020	Feb. 28, 2020	Feb. 28, 2020	Feb. 28, 2020
GBP [Member]
Sales revenue | £		£ 333,191		£ 274,432
Sale revenue, percentage	11.40%	11.40%	16.80%	16.80%

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Revenue Classes - Schedule of Operating Revenue Classes (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2018 USD ($)	May 31, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 GBP (£)	May 31, 2017 USD ($)	May 31, 2017 GBP (£)
Revenues	$ 2,091,034	$ 1,163,202	$ 3,914,743		$ 2,084,049
Direct costs of revenue			2,939,127		1,619,074
GBP [Member]
Revenues				£ 2,932,970	1,665,394
Direct costs of revenue				2,205,590	1,273,634
Coffee and Complementary Food Products [Member]
Revenues			3,538,442		1,826,925
Direct costs of revenue			2,819,984		1,554,987
Coffee and Complementary Food Products [Member] | GBP [Member]
Revenues | £				2,651,111		£ 1,459,928
Direct costs of revenue | £				2,116,349		1,223,067
Coffee School [Member]
Revenues			6,786		6,906
Direct costs of revenue			6,108		5,558
Coffee School [Member] | GBP [Member]
Revenues | £				5,083		5,520
Direct costs of revenue | £				4,575		4,429
Management Fees [Member]
Revenues			369,515		250,218
Direct costs of revenue			$ 113,035		$ 58,529
Management Fees [Member] | GBP [Member]
Revenues | £				276,776		199,946
Direct costs of revenue | £				£ 84,666		£ 46,138

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Capital Lease Obligations - Schedule of Capital Lease Obligations (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Fixed assets, net	$ 2,600,424	$ 1,957,650
Capital Lease Obligations [Member]
Total fixed assets	2,872,039	2,615,718
Less: Accumulated depreciation	1,155,123	858,322
Fixed assets, net	1,716,916	1,757,396
Capital Lease Obligations [Member] | Computer Equipment [Member]
Total fixed assets	66,429	66,429
Capital Lease Obligations [Member] | Office Equipment [Member]
Total fixed assets	45,276	23,609
Capital Lease Obligations [Member] | Site Equipment and Machinery [Member]
Total fixed assets	492,547	457,134
Capital Lease Obligations [Member] | Site Fit Out Costs [Member]
Total fixed assets	1,799,750	1,799,750
Capital Lease Obligations [Member] | Site Furniture, Fixtures and Fittings [Member]
Total fixed assets	$ 468,037	$ 268,796

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Capital Lease Obligations - Schedule of Capital Lease Obligations Future Minimum Payment (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Debt Disclosure [Abstract]
2018	$ 94,568
2019	168,035
2020	135,040
2021	86,622
2022	13,875
Future	2,753
Total	500,893
Less: Interest	23,142
Present value of minimum lease payments	477,751
Less: Current portion of capital lease obligations	172,348	$ 209,539
Capital lease obligations, net of current portion	$ 305,403