Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
May 31, 2020 | Jul. 15, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | CANNABIS GLOBAL, INC. | |
Entity Central Index Key | 0001413488 | |
Document Type | 10-Q | |
Document Period End Date | May 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --08-31 | |
Document Fiscal Period Focus | Q3 | |
Is Entity a Shell Company? | false | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity File Number | 000-27039 | |
Entity Common Stock, Shares Outstanding | 24,127,592 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | DE | |
Document Fiscal Year Focus | 2020 | |
Entity Emerging Growth Company | true | |
Entity Small Business | true | |
Entity Ex Transition Period | false |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Current Assets: | ||
Cash | $ 84,866 | $ 152,082 |
Accounts Receivable | 5,000 | 0 |
Accounts Receivable - Related Party | 5,003 | 0 |
Inventory | 39,051 | 2,299 |
Total Current Assets | 133,920 | 154,381 |
Machinery & Equipment- Net | 14,304 | 13,248 |
Other Assets | ||
Intangible Assets | 612,400 | 0 |
Note Receivable | 40,000 | 40,000 |
Rent Deposit | 7,200 | 7,200 |
TOTAL ASSETS | 807,824 | 214,829 |
Current Liabilities: | ||
Accounts Payable | 191,510 | 92,806 |
Accounts Payable - Related Party | 0 | 1,139 |
Accrued Interest | 25,576 | 0 |
Accrued Professional and Legal Expenses | 0 | 5,885 |
Accrued R&D Expenses | 0 | 6,250 |
Convertible Notes, Net of Debt Discount of $298,706 and 0, respectively | 666,562 | 33,334 |
Derivative Liability | 1,903,234 | 0 |
Note Payable - Related Party | 35,500 | 14,000 |
Total Current Liabilities | 2,822,382 | 153,414 |
Total Liabilities | 2,822,382 | 153,414 |
Stockholder's Equity (Deficit | ||
Preferred Stock, par value $0.0001, 10,000,000 shares Authorized, 8,000,000 shares Issued and Outstanding at May 31, 2020 and August 31, 2019 | 600 | 0 |
Common Stock, par value $0.001, 290,000,000 shares Authorized, 12,524,307 shares Issued and Outstanding at August 31, 2019 and 17,066,096 at May 31, 2020 | 1,707 | 1,253 |
Additional Paid-In Capital | 3,005,633 | 1,184,923 |
Shares to be issued | 1,305 | 2,840 |
Accumulated Deficit | (5,023,803) | (1,127,601) |
Total Stockholder's Equity (Deficit) | (2,014,558) | 61,415 |
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT) | $ 807,824 | $ 214,829 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Convertible Notes, Debt Discount Current | $ 298,706 | $ 0 |
Preferred stock, par or stated value per share (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 8,000,000 | 8,000,000 |
Preferred stock, shares outstanding | 8,000,000 | 8,000,000 |
Common stock, par or stated value per share (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 290,000,000 | 290,000,000 |
Common stock, shares issued | 17,066,096 | 12,524,307 |
Common stock, shares outstanding | 17,066,096 | 12,524,307 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Revenues: | ||||
Products Sales | $ 19,750 | $ 0 | $ 24,753 | $ 0 |
Consulting Revenue - Related Party | 0 | 0 | 5,000 | 0 |
Total Revenue | 19,750 | 0 | 29,753 | 0 |
Cost of Goods Sold | 16,788 | 0 | 19,688 | 0 |
Gross Profit | 2,962 | 0 | 10,065 | 0 |
Operating Expenses: | ||||
Advertising fees | 80,705 | 0 | 96,399 | 0 |
Consulting services | 631,950 | 0 | 735,495 | 0 |
Professional fees | 355,692 | 500 | 637,806 | 15,354 |
General and administrative expense | 170,303 | 5,325 | 553,658 | 9,914 |
Total Operating Expenses | 1,238,650 | 5,825 | 2,023,358 | 25,268 |
Operating Loss | (1,235,688) | (5,825) | (2,013,293) | (25,268) |
Other Income (Expense) | ||||
Interest expense | (283,448) | (2,644) | (836,901) | (7,827) |
Gain on Debt Cancellation | 50,747 | 10,000 | 50,747 | 10,000 |
Changes in Fair Value of Derivative Liabilities | (1,280,180) | 0 | (1,096,755) | 0 |
Total Other Income (Expense) | (1,512,881) | 7,356 | (1,882,909) | 2,173 |
Net Loss | $ (2,748,569) | $ 1,531 | $ (3,896,202) | $ (23,095) |
Basic & Diluted Loss per Common Share | $ (0.22) | $ 0 | $ (0.03) | $ 0 |
Weighted Average Common Shares Outstanding | 12,549,491 | 12,257,640 | 12,549,491 | 12,257,640 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (Unaudited) - USD ($) | Class A Preferred Stock | Common Stock | Common Stock to be issued | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance, Shares at Aug. 31, 2018 | 12,257,640 | |||||
Beginning Balance, Value at Aug. 31, 2018 | $ 1,226 | $ 601,825 | $ (738,004) | $ (134,953) | ||
Net Loss | (17,283) | (17,283) | ||||
Ending Balance, Shares at Nov. 30, 2018 | 12,257,640 | |||||
Ending Balance, Value at Nov. 30, 2018 | $ 1,226 | 601,825 | (755,287) | (152,236) | ||
Net Loss | 1,531 | 1,531 | ||||
Ending Balance, Shares at Feb. 28, 2019 | 12,257,640 | |||||
Ending Balance, Value at Feb. 28, 2019 | $ 1,226 | 601,825 | (753,756) | (150,705) | ||
Beginning Balance, Shares at Aug. 31, 2019 | 12,524,307 | 1,893,333 | ||||
Beginning Balance, Value at Aug. 31, 2019 | $ 1,253 | $ 189 | 1,187,574 | (1,127,601) | 61,415 | |
Common stock issued for services rendered, Shares | 1,893,333 | (1,893,333) | ||||
Common stock issued for services rendered, Value | $ 189 | $ (189) | ||||
Shares Issued for Services, Shares | 23,333 | |||||
Shares Issued for Services, Value | $ 2 | 20,881 | 20,883 | |||
Stock based compensation | 95,670 | 95,670 | ||||
Proceeds from common stock subscriptions, Shares | 203,333 | |||||
Proceeds from common stock subscriptions, Value | $ 20 | 74,980 | 75,000 | |||
Proceeds from common stock subscriptions - To be Issued, Shares | 260,000 | |||||
Proceeds from common stock subscriptions - To be Issued, Value | $ 26 | 64,974 | 65,000 | |||
Discount on convertible note, Value | 20,000 | 20,000 | ||||
Effects of Reverse stock-split, shares | 188,822 | |||||
Effects of Reverse stock-split, Value | $ 19 | (19) | ||||
Net Loss | (385,437) | (385,437) | ||||
Ending Balance, Shares at Nov. 30, 2019 | 14,833,128 | 260,000 | ||||
Ending Balance, Value at Nov. 30, 2019 | $ 1,483 | $ 26 | 1,464,060 | (1,513,038) | (47,469) | |
Common stock issued for services rendered, Value | ||||||
Stock based compensation | 94,618 | 94,618 | ||||
Common stock issued in settlement of convertible notes payable and accrued interest, Shares | 400,000 | |||||
Common stock issued in settlement of convertible notes payable and accrued interest, Value | $ 400 | 112,000 | 112,400 | |||
Proceeds from common stock subscriptions - To be Issued, Shares | 260,000 | (260,000) | ||||
Proceeds from common stock subscriptions - To be Issued, Value | $ 26 | $ (26) | ||||
Net Loss | (762,196) | (762,196) | ||||
Ending Balance, Shares at Feb. 29, 2020 | 15,093,128 | 400,000 | ||||
Ending Balance, Value at Feb. 29, 2020 | $ 1,509 | $ 400 | 1,670,678 | (2,275,234) | (602,647) | |
Common stock issued for services rendered, Shares | 750,000 | 2,100,000 | ||||
Common stock issued for services rendered, Value | $ 75 | $ 210 | 737,040 | 737,325 | ||
Stock based compensation | 97,772 | 97,772 | ||||
Proceeds from common stock subscriptions, Shares | 1,222,941 | |||||
Proceeds from common stock subscriptions, Value | $ 122 | 159,878 | 160,000 | |||
Common stock issued in settlement of convertible notes payable and accrued interest, Shares | ||||||
Common stock issued in settlement of convertible notes payable and accrued interest, Value | ||||||
Discount on convertible note, Shares | 694,900 | |||||
Discount on convertible note, Value | $ 695 | 340,066 | 340,761 | |||
Preferred stock issued, Shares | 6,000,000 | |||||
Preferred stock issued, Value | $ 600 | 200 | 800 | |||
Net Loss | (2,748,569) | (2,748,569) | ||||
Ending Balance, Shares at May. 31, 2020 | 6,000,000 | 17,066,069 | 3,194,900 | |||
Ending Balance, Value at May. 31, 2020 | $ 600 | $ 1,707 | $ 1,305 | $ 3,005,633 | $ (5,023,803) | $ (2,014,558) |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
May 31, 2020 | May 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Loss | $ (3,896,202) | $ (23,095) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Non-Cash Interest Expense | 841,870 | 0 |
Depreciation Expense | 2,444 | 0 |
Stock Based Compensation | 835,897 | 0 |
Changes in Fair Value of Derivative Liabilities | 1,096,755 | 0 |
Changes In: | ||
Accounts Receivable | (5,000) | 0 |
Accounts Receivable - Related Party | (5,003) | 0 |
Inventory | (36,752) | 0 |
Accounts Payable | 98,704 | (11,688) |
Accounts Payable - Related Party | (1,139) | (6,200) |
Accrued Professional and Legal Expenses | (5,885) | 0 |
Accrued R&D Expenses | (6,250) | 0 |
Accrued Interest | 25,576 | 5,235 |
Accrued Interest - Related Party | 0 | 2,592 |
Net Cash Used in Operating Activities | (1,054,985) | (33,156) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of Machinery & Equipment | (3,500) | 0 |
Net Cash Provided by Investing Activities | (3,500) | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from Issuance of Common Stock | 300,000 | 0 |
Proceeds from Convertible Debentures | 691,269 | 0 |
Proceeds from Note Payable - Related Party | 0 | 28,504 |
Net Cash Provided by Financing Activities | 991,269 | 28,504 |
Net (Decrease) Increase in Cash | (67,216) | (4,652) |
Cash at Beginning of Period | 152,082 | 4,652 |
Cash at End of Period | 84,866 | 0 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid during the year for: Gain on Debt Cancellation | 50,747 | 10,000 |
Cash paid during the year for: Franchise Taxes | 0 | 0 |
Shares to be issued and loan incurred for acquisition of intangible assets | $ 612,400 | $ 0 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
May 31, 2020 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | Note 1. Organization and Description of Business Cannabis Global, Inc., formerly known as MCTC Holdings, Inc., is located at 520 S. Grand Avenue, Suite 320, Los Angeles, California 90071. Our telephone number is (310) 986-4929 and our website is www.cannabisglobalinc.com. Our shares of Common Stock are quoted on the OTC Markets Pink Tier, operated by OTC Markets Group, Inc., under the ticker symbol “MCTC.” We are a research and development company focused on cannabinoid research and unique delivery cannabinoid delivery methods. Our aim is to create and commercialize proprietary engineered technologies to deliver hemp extracts and cannabinoids to the human body. We are achieving this goal by way of the introduction to the industry of new hemp and hemp extract infusion technologies, and via the introduction of new consumer products based on these technologies. Our research and development programs included the following; 1) Development of new routes and vehicles for hemp extraction and cannabinoid delivery to the human body. 2) Production of unique polymeric nanoparticles and fibers for use in oral and dermal cannabinoid delivery. In particular, we are developing specific technology to delivery rare cannabinoids. 3) Research and commercialization of new methodologies to isolate and/or concentrate various cannabinoids and other substances that comprise industrial hemp oil and other extracts. 4) Establishment of new methods to increase the bioavailability of cannabinoids to the human body utilizing nanoparticles, nanofibers, and other proven bioenhancers, including naturally occurring glycosides, unique infusions with other food stuffs, and d-α-Tocopherol polyethylene glycol 1000 succinate (TPGS), which is widely used as a water-soluble vitamin E formulation. 5) A comprehensive research and development initiative, named Project Varin, to develop novel production methods for production of, and use for, rare cannabinoids, Tetrahydrocannabivarin (THC-V) and Cannabinol (CBN). Several developments have been made via the research initiative, including novel production methods for polymeric nanoparticles and nanofibers, and novel products based on the nanoparticles and nanofibers produced by the Company is its research partners. 6) Unique “powderization” technologies to transform liquid based cannabinoid-containing substances into free flowing power form for use in foods and beverages. On May 6, 2020, the Company signed a joint venture agreement with RxLeaf, Inc. (“RxLeaf”) a Delaware corporation, creating a joint venture for the purpose of marketing the Company’s products to consumers. Under the terms of the agreement, the Company will produce products, which will be sold by RX Leaf via its digital marketing assets. The Company agreed to share the profits from the joint venture on a 50/50 basis. A copy of the joint venture agreement is included as an exhibit. On March 30, 2020, the Company filed Articles of Incorporation for Cannabis Global, Inc. in the State of Nevada. Concurrently, the Company filed Articles of Domestication in the State of Nevada and Articles of Conversion in the State of Delaware, to effectively change its domicile from Delaware to Nevada, effective March 30, 2020, and to begin operations as of that date as Cannabis Global, Inc., a Nevada Corporation. On April 13, 2020, the Company filed a Notice of Corporate Action with FINRA to formally change its name, trading symbol and domicile. The Company is not planning to change its fiscal year. As of the date of this filing, the FINRA Corporate Action is pending. On February 16, 2020, the Company acquired Lelantos Biotech, Inc., a Wyoming corporation (“Lelantos”). Lelantos owned assets including intellectual property in the form of trade secrets, intellectual property rights and trade secrets concerning cannabinoid delivery systems. Lelantos had no liabilities or other business operations. The parties to the acquisition agreement were the Company, Lelantos, Ma Helen M. Am Is, Inc., a Wyoming corporation (“Helen M.”), East West Pharma Group, Inc., a Wyoming corporation (“East West”), and New Horizons Laboratory Services, Inc., a Wyoming corporation (“New Horizons”). There were no material relationships between the Company or its affiliates, and Lelantos, Helen M., East West, New Horizons, or any of their respective affiliates, other than in respect of the material definitive agreement. The terms and conditions of the agreement required the Company to issue 400,000 shares of its common stock to Lelantos, and separately, issue an aggregate of $500,000 in the form of notes payable as follows: $225,000 to Helen M.; $50,000 to East West, $225,000 to New Horizons. The notes matured on May 31, 2020. All notes payable had terms and conditions more fully described in the Company’s Form 8-K filing of February 20, 2020. On May 31, 2020, the Company and East West agreed to cancel the $50,000 note. All principal and interest were forgiven. The Company did not incur any penalty or other costs associated with the cancellation of the East West note. On May, 30, 2020, the Company, New Horizons and Helen M. entered into forbearance agreements concerning their respective notes payable, The forbearance agreements resulted in new notes amending the maturity dates to November 15, 2020, and increased the interest rates on the notes to 9% respectively. On May 31, 2020, the Company, New Horizons and Helen M, entered into material modification agreements cancelling the original February 4, 2020 notes, as amended, completely, and the obligation to issue 400,000 shares to Lelantos under the acquisition agreement. The modification agreement required the Company, as consideration for the acquisition of Lelantos, to issue a new single note to Lelantos in the sum of $500,000, with payment terms and conditions more fully disclosed in the Company’s Form 8-K filed on June 18, 2020. This modification agreement is outlined in further detail in Subsequent Events On August 9, 2019, our board of directors determined the Company no longer met the definition of a Shell Company as defined in Item 1101(b) of Regulation AB (§ 229.1101(b) of this chapter), which defines a Shell Company as one that has: 1) No or nominal operations; and 2) Either: (i) No or nominal assets; (ii) Assets consisting solely of cash and cash equivalents; or (iii) Assets consisting of any amounts of cash and cash equivalents and nominal other assets. By way of the Company: 1) beginning business activities and operations, 2) hiring its CEO, 3) appointing a highly experienced board of directors, 4) retaining consultants, 5) signing two property leases, 6) approval of budgets and business plans for several initiatives, 7) production of product samples, 8) sales initiatives to prospective customers, and other related business activities, the board of directors believes such activities are qualified as non-nominal operations and therefore the board of directors declared its believe the Company is no longer defined by Item 1101(b) of Regulation AB (§ 229.1101(b) of this chapter). On August 9, 2019, the Company filed a DBA in California registering the operating name Cannabis Global. On July 1, 2019, the Company acquired Action Nutraceuticals, Inc., a company owned by our current CEO, Arman Tabatabaei for one thousand dollars ($1,000) (See “Transactions with Related Persons, Promoters and Certain Control Persons”). On or about June 27, 2018 we changed domiciles from the State of Nevada to the State of Delaware and thereafter reorganized under the Delaware Holding Company Statute Delaware General Corporation Law Section 251(g). On or about July 12, 2018, two subsidiaries were formed for the purpose of effecting the reorganization. We incorporated MCTC Holdings, Inc. and MCTC Holdings Inc. incorporated MicroChannel Corp. We then effected a merger involving the three constituents and under the terms of the merger we were merged into MicroChannel Corp., with MicroChannel Corp. being the surviving entity, and our separate corporate existence ceasing. Following the merger MCTC Holdings, Inc. became the surviving publicly traded issuer and all of our assets and liabilities were merged into MCTC Holdings, Inc.’s wholly owned subsidiary MicroChannel Corp. Our shareholders became the shareholders of MCTC Holdings, Inc. on a one for one basis. On May 25, 2019, Lauderdale Holdings, LLC, a Florida limited liability company, in which former Chief Executive Officer, Garry McHenry maintains a controlling interest, sold 8,666,667 common shares of MCTC Holdings, Inc., representing approximately 70.7% of the 12,257,640 issued and outstanding shares to Messrs. Robert Hymers, Edward Manolos and Dan Nguyen, all of whom were previously unaffiliated parties. Each purchased 2,888,889 common shares for $108,333.33 each or an aggregate of $325,000, utilizing personal funds. This series of transactions constitute a change in control of the Company. The assets and liabilities of MicroChannel Corp. were spun out to Lauderdale Holdings, LLC as part of the change in control. On April 4, 2005, MultiChannel changed its name to MicroChannel Technologies Corporation. The Company’s original name was MultiChannel Technologies Corporation (“MultiChannel”) which was incorporated on February 28, 2005 under the laws of the State of Nevada (U.S.A.) and was originally formed as a wholly-owned subsidiary of Octillion Corp. (“Octillion”). Octillion (a Canadian company was trading in the OTC Markets under the symbol “OCTL”). At the time of Octillion’s existence, Octillion was a development stage technology company focused on the identificati0n, acquisition and development of emerging solar energy and solar related technologies and products. On January 14, 2009, Octillion Corp. (Symbol: OCTL), the parent company of MicroChannel announced that it had changed its name to New Energy Technologies, Inc. (Symbol: NENE) (“New Energy”). The name change became effective on the Over-the-Counter Bulletin Board at the opening of trading on January 14, 2009. On June 24, 2008, MicroChannel announced that it initiated trading of its stocks on the OTC Bulletin Board under the stock symbol “MCTC”. On August 22, 2007, by corporate action taken by MicroChannel’s executive team and board members, the company amended its Articles of Incorporation to increase its authorized capital stock to 300,000,000 million shares of common stock, $0.0001 par value per share. As of September 25, 2007, there were 1,000,000 shares of common stock were issued and outstanding; there were no preferred shares issued and outstanding. The directors and sole shareholder have approved a forward split of their issued and outstanding shares of common stock on the basis of 538,646 for 1 for the purpose of effecting the distribution. |
Going Concern Uncertainties
Going Concern Uncertainties | 9 Months Ended |
May 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern Uncertainties | Note 2. Going Concern Uncertainties During recent financial reporting periods, the Company has continued its research and development programs and completed the development of several of its products, beginning initial shipments to new customers. For the quarter ending May 31, 2020, revenues were $19,750. The Company has an accumulated deficit of $5,023,803 as of May 31, 2020, and does not have positive cash flows from operating activities. Furthermore, as shown in the accompanying financial statements for nine months ended May 31, 2020, the Company had a net loss of $3,896,202 and used cash in operations of $1,054,985. The Company expects to incur additional losses as it executes its business strategy. The Company will be subject to the risks, uncertainties, and difficulties frequently encountered by early-stage companies. The Company may not be able to successfully address any or all of these risks and uncertainties. Failure to adequately do so could cause the Company’s business, results of operations, and financial condition to suffer. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance date of these financial statements. The Company’s ability to continue as a going concern is an issue due to its net losses and negative cash flows from operations, and its need for additional financing to fund future operations. Management plans to obtain necessary funding from outside sources and through the sales of Company shares. There can be no assurance that such funds, if available, can be obtained on terms reasonable to the Company. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that may result from the outcome of this uncertainty. Based on the Company’s current level of expenditures, management believes that cash on hand is not adequate to fund operations for the next twelve months. Management of the Company is estimating approximately $1,000,000 will be required over the next twelve months to fully execute its business strategy. These can be no assurance the Company will be able to obtain such funds. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
May 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3. Summary of Significant Accounting Policies Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the amounts reported in those statements. We have made our best estimates of certain amounts contained in our consolidated financial statements. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities. However, application of our accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties, and, as a result, actual results could differ materially from these estimates. Management believes that the estimates, assumptions, and judgments involved in the accounting policies described below have the most significant impact on our consolidated financial statements. We cannot predict what future laws and regulations might be passed that could have a material effect on our results of operations. We assess the impact of significant changes in laws and regulations on a regular basis and update the assumptions and estimates used to prepare our financial statements when we deem it necessary. Derivative Instruments The fair value of derivative instruments is recorded and shown separately under current liabilities. Changes in the fair value of derivatives liability are recorded in the consolidated statement of operations under non-operating income (expense). Our Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, the Company uses a weighted average Binomial option-pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Action Nutraceuticals, Inc. and Aidan & Co, Inc. All intercompany balances and transactions have been eliminated in consolidation. Cash and Cash Equivalents We consider all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents are held in operating accounts at a major financial institution. Inventory Inventory is primarily comprised of work in progress. Inventory is valued at cost, based on the specific identification method, unless and until the market value for the inventory is lower than cost, in which case an allowance is established to reduce the valuation to market value. As of May 31, 2020, and May 31, 2019, market values of all of our inventory were at cost, and accordingly, no such valuation allowance was recognized. Deposits Deposits is comprised of advance payments made to third parties, primarily for inventory for which we have not yet taken title. When we take title to inventory for which deposits are made, the related amount is classified as inventory, then recognized as a cost of revenues upon sale (see “Costs of Revenues” below). There were no deposits as of May 31, 2020 or May 31, 2019. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets is primarily comprised of advance payments made to third parties for independent contractors’ services or other general expenses. Prepaid services and general expenses are amortized over the applicable periods, which approximate the life of the contract or service period. Accounts Receivable Accounts receivable are recorded at the net value of face amount less any allowance for doubtful accounts. On a periodic basis, we evaluate our accounts receivable and, based on a method of specific identification of any accounts receivable for which we deem the net realizable value to be less than the gross amount of accounts receivable recorded, we establish an allowance for doubtful accounts for those balances. In determining our need for an allowance for doubtful accounts, we consider historical experience, analysis of past due amounts, client creditworthiness and any other relevant available information. However, our actual experience may vary from our estimates. If the financial condition of our clients were to deteriorate, resulting in their inability or unwillingness to pay our fees, we may need to record additional allowances or write-offs in future periods. This risk is mitigated to the extent that we collect retainers from our clients prior to performing significant services. The allowance for doubtful accounts, if any, is recorded as a reduction in revenue to the extent the provision relates to fee adjustments and other discretionary pricing adjustments. To the extent the provision relates to a client's inability to make required payments on accounts receivables, the provision is recorded in operating expenses. As of May 31, 2020, and May 31, 2019, we had $0 and $0 allowance for doubtful accounts, respectively. Property and Equipment, net Property and Equipment is stated at net book value, cost less depreciation. Maintenance and repairs are expensed as incurred. Depreciation of owned equipment is provided using the straight-line method over the estimated useful lives of the assets, ranging from two to seven years. Depreciation of capitalized construction in progress costs, a component of property and equipment, net, begins once the underlying asset is placed into service and is recognized over the estimated useful life. Property and equipment are reviewed for impairment as discussed below under “Accounting for the Impairment of Long-Lived Assets.” Accounting for the Impairment of Long-Lived Assets We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Upon such an occurrence, recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to forecasted undiscounted net cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. For long-lived assets held for sale, assets are written down to fair value, less cost to sell. Fair value is determined based on discounted cash flows, appraised values or management's estimates, depending upon the nature of the assets. We have not recorded any impairment charges related to long-lived assets during the quarter ended May 31, 2020 and May 21, 2019. Beneficial Conversion Feature If the conversion features of conventional convertible debt provides for a rate of conversion that is below market value at issuance, this feature is characterized as a beneficial conversion feature (“BCF”). We record a BCF as a debt discount pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ACF”) Topic 470-20 Debt with Conversion and Other Options Revenue Recognition For annual reporting periods after December 15, 2017, the Financial Accounting Standards Board (“FASB”) made effective ASU 2014-09 “Revenue from Contracts with Customers” to supersede previous revenue recognition guidance under current U.S. GAAP. Revenue is now recognized in accordance with FASB ASC Topic 606, Revenue Recognition. The guidance presents a single five-step model for comprehensive revenue recognition that requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Two options are available for implementation of the standard which is either the retrospective approach or cumulative effect adjustment approach. The guidance becomes effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. We determined to implement the cumulative effect adjustment approach to our implementation of FASB ASC Topic 606, with no restatement of the comparative periods presented. We intend to apply this method to any incomplete contracts we determine are subject to FASB ASC Topic 606 prospectively. As is more fully discussed below, we are of the opinion that none of our contracts for products contain significant financing components that require revenue adjustment under FASB ASC Topic 606. In accordance with FASB ASC Topic 606, Revenue Recognition, we will recognize revenue when persuasive evidence of a significant financing component exists in our product sales contracts. We examine and evaluate when our customers become liable to pay for goods; how much consideration is paid as compared to the cash selling price of the goods; and, the length of time between our performance and the receipt of payment. Product Sales Revenue from product sales, including delivery fees, is recognized when an order has been obtained from the customer, the price is fixed and determinable when the order is placed, the product is shipped, and collectability is reasonably assured. Generally, we drop-ship orders to our clients with shipping-point or destination terms. For any shipments with destination terms, the Company defers revenue until delivery to the customer. Given the facts that (1) our customers exercise discretion in determining the timing of when they place their product order; and, (2) the price negotiated in our product sales is fixed and determinable at the time the customer places the order, we are not of the opinion that our product sales indicate or involve any significant customer financing that would materially change the amount of revenue recognized under the sales transaction, or would otherwise contain a significant financing component for us or the customer under FASB ASC Topic 606. Costs of Revenues Our policy is to recognize the costs of revenue in the same manner in conjunction with revenue recognition. Costs of revenues include the costs directly attributable to revenue recognition and include compensation and fees for services, travel and other expenses for services and costs of products and equipment. Selling, general and administrative expenses are charged to expense as incurred. Stock-Based Compensation Restricted shares are awarded to employees and entitle the grantee to receive shares of restricted common stock at the end of the established vesting period. The fair value of the grant is based on the stock price on the date of grant. We recognize related compensation costs on a straight-line basis over the requisite vesting period of the award, which to date has been one year from the grant date. Income Taxes We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns in accordance with applicable accounting guidance for accounting for income taxes, using currently enacted tax rates in effect for the year in which the differences are expected to reverse. We record a valuation allowance when necessary to reduce deferred tax assets to the amount expected to be realized. For the quarterly reporting periods ending May 31, 2020, and May 31, 2019, we incurred no income taxes and had no liabilities related to federal or state income taxes. Loss Contingencies From time to time the Company is subject to various legal proceedings and claims that arise in the ordinary course of business. On at least a quarterly basis, consistent with ASC 450-20-50-1C, if the Company determines that there is a reasonable possibility that a material loss may have been incurred, or is reasonably estimable, regardless of whether the Company accrued for such a loss (or any portion of that loss), the Company will confer with its legal counsel, consistent with ASC 450. If the material loss is determinable or reasonably estimable, the Company will record it in its accounts and as a liability on the balance sheet. If the Company determines that such an estimate cannot be made, the Company's policy is to disclose a demonstration of its attempt to estimate the loss or range of losses before concluding that an estimate cannot be made, and to disclose it in the notes to the financial statements under Contingent Liabilities. Net Income (Loss) Per Common Share We report net income (loss) per common share in accordance with FASB ASC 260, “Earnings per Share”. This statement requires dual presentation of basic and diluted earnings with a reconciliation of the numerator and denominator of the earnings per share computations. Basic net income (loss) per share is computed by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period and excludes the effects of any potentially dilutive securities. Diluted net income (loss) per share gives effect to any dilutive potential common stock outstanding during the period. The computation does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended |
May 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Note 4. Net Loss Per Share During the three-month quarterly reporting period ending May 31, 2020, the Company recorded a net loss of $2,748,569, which equals a loss of $0.22 on a weighted average common shares outstanding of 12,549,491 common shares. Net loss per share during the three-month quarterly reporting period ending May 31, 2019 was $0.00 per share. The increase in the net loss per share for the three-month quarterly reporting period ending May 31, 2020 was primarily a result of increased operating expenses as the Company reorganized and due to increased interest expenses. |
Notes Receivable - Related Part
Notes Receivable - Related Party | 9 Months Ended |
May 31, 2020 | |
Notes to Financial Statements | |
Notes Receivable - Related Party | Note 5. – Notes Receivable – Related Party On April 30, 2020, the Company entered into a settlement agreement with its Chief Financial Officer (the “CFO”) whereby the CFO resigned and the Company issued a promissory note for $30,000, which represented the remaining amount owed to the CFO for services rendered. The note matures December 31, 2020 and bears interest at the rate of 10% per annum, payable at maturity. The noteholder has the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at a fixed conversion price of $0.02 per share, subject to adjustment. As a result of the beneficial conversion price, upon issuance, the Company recognized debt discount of $30,000, which is being amortized to interest expense over the term of the note. As of May 31, 2020, the carrying value of the note was $3,796, net of debt discount of $26,204 and accrued interest was $255. Upon the issuance of the convertible promissory notes with variable conversion prices, the Company determined that the features associated with the embedded conversion option embedded in the debentures should be accounted for at fair value, as a derivative liability, as the Company cannot determine if a sufficient number of shares would be available to settle all potential future conversion transactions. At the issuance date of the convertible notes payable, the Company estimated the fair value of the embedded derivatives of $1,038,111 using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 389.94% to 398.53%, (3) risk-free interest rate of 0.16% to 1.60%, (4) expected life of one to three years and (5) estimated fair value of the Company’s common stock of $0.17 to $1.07 per share. On May 31, 2020, the Company estimated the fair value of the embedded derivatives of $2,189,684 using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 395.12%, (3) risk-free interest rate of 0.16% to 0.17%, (4) expected life of 0.57 to 1.75 years, and (5) estimated fair value of the Company’s common stock of $0.55 per share. The Company issued two convertible promissory notes during the three month financial period ended February 29, 2020 having an aggregate principal amount of $133,101 in exchange for accrued expenses owed to related parties, of which $79,333 is payable to the Company’s current executive officer, Arman Tabatabaei, and $53,768 is payable to the Company’s former chief financial officer. The notes mature two years from the respective issuance date and bear interest at the rate of 10% per annum, payable at maturity. The noteholders shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at a variable conversion price of 50% of the average of the previous twenty (20) trading day closing prices of the Company’s common stock, subject to adjustment. As a result of the variable conversion prices, upon issuance, the Company recognized total debt discount of $133,101, which is being amortized to interest expense over the term of the notes. As of May 31, 2020, the carrying value of the notes was $19,021, net of debt discount of $114,080 and accrued interest was $3,782. On May 22, 2020, Mr. Tabatabaei converted the principal amount of $79,333 and interest of 2,608.33, for a total amount of $81,941.55 into 694,902 common shares. On May 25, 2019, the Company issued two notes payable to Company directors Edward Manolos and Dan Nguyen, each in the amount of $16,666,67. The notes, which do not have a defined due date, outline a 5% per annum interest rate. These notes are additionally described herein in Footnote 5 - Notes Receivable, Related Party and in the footnote outlining Related Party Transactions. These notes are additionally described herein in Footnote 6- Notes to Shareholders, Related Party and in the footnote outlining Related Party Transactions. On July 9, 2019, the Company, through its Action Nutraceuticals subsidiary, loaned, Split Tee, LLC (“Split Tee”), a venture associated with Director Edward Manolos, $20,000 to engage in an exploratory research project. An additional $20,000 was supplied to Split Tee on August 23, 2019. The loans carry interest at the rate of 10% per annum and are due in one year for issuance. In addition, The Company, via Action Nutraceuticals subsidiary, invoiced Split Tee $5,000 as a consulting fee. Because of Mr. Manolos’ association as a director, the Company believes these transactions are defined by 17 CFR § 229.404 - (Item 404). Transactions with related persons, promoters and certain control persons, which would require specific disclosures under the section cited. |
Intangible Assets
Intangible Assets | 9 Months Ended |
May 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 6. Intangible Assets On February 16, 2020, the Company acquired Lelantos Biotech, Inc., a Wyoming corporation (“Lelantos”). Lelantos owned assets including intellectual property in the form of trade secrets, intellectual property rights and trade secrets concerning cannabinoid delivery systems. Lelantos had no liabilities or other business operations. The parties to the acquisition agreement were the Company, Lelantos, Ma Helen M. Am Is, Inc., a Wyoming corporation (“Helen M.”), East West Pharma Group, Inc., a Wyoming corporation (“East West”), and New Horizons Laboratory Services, Inc., a Wyoming corporation (“New Horizons”). There were no material relationships between the Company or its affiliates, and Lelantos, Helen M., East West, New Horizons, or any of their respective affiliates, other than in respect of the material definitive agreement. The terms and conditions of the agreement required the Company to issue 400,000 shares of its common stock to Lelantos, and separately, issue an aggregate of $500,000 in the form of notes payable as follows: $225,000 to Helen M.; $50,000 to East West, $225,000 to New Horizons. The notes matured on May 31, 2020. All notes payable had terms and conditions more fully described in the Company’s Form 8-K filing of February 20, 2020. On May 31, 2020, the Company and East West agreed to cancel the $50,000 note. All principal and interest were forgiven. The Company did not incur any penalty or other costs associated with the cancellation of the East West note. On May, 30, 2020, the Company, New Horizons and Helen M. entered into forbearance agreements concerning their respective notes payable, The forbearance agreements resulted in new notes amending the maturity dates to November 15, 2020, and increased the interest rates on the notes to 9% respectively. On May 31, 2020, the Company, New Horizons and Helen M, entered into material modification agreements cancelling the original February 4, 2020 notes, as amended, completely, and the obligation to issue 400,000 shares to Lelantos under the acquisition agreement. The modification agreement required the Company, as consideration for the acquisition of Lelantos, to issue a new single note to Lelantos in the sum of $500,000, with payment terms and conditions more fully disclosed in the Company’s Form 8-K filed on June 18, 2020. This modification agreement is outlined in further detail in Subsequent Events All of the Company’s patents are provisional patents. As such, the cost of the provisional patents and pending applications will not be amortized until the permanent patent is filed and approved. |
Note Payable
Note Payable | 9 Months Ended |
May 31, 2020 | |
Note Payable | |
Note Payable | Note 7. Note Payable On February 12, 2020, the Company issued three Sellers Acquisition promissory notes having an aggregate principal amount of $500,000 pursuant to an Acquisition Agreement to acquire Lelantos Biotech. The notes mature May 31, 2020; $450,000 (two tranches of $225,000) and $50,000 of the notes bear interest at the rate of 8% and 5% per annum, respectively. In the event, the notes are not paid within the Cash Repayment Period (prior to the Maturity Date), the notes specify the holder shall have two options for repayment including: [a] an Alternative Payment Stake Option equal to a 6.75%, 6.75% and 1.5% (or a pro-rated amount if the debt has been partially paid) fully diluted ownership position in the Company after August 4, 2020, August 12, 2020 and August 30, 2020, respectively; or [b] a Buy Out Option, anytime after the note has been outstanding for at least one year, equal to the total outstanding shares of the Company on the day of election, times 6.75%, 6.75% and 1.5%, respectively, times the average closing price of the Company’s common stock over the preceding 30 trading days, times 40% (due and payable within 90 days). Anti-dilution rights are provided for five years on the Sellers Acquisition notes and for 182 days after conversion to an Alternative Payment Stake. The notes include a Leak Out provision, should the Alternative Payment Stake option be elected, whereby no more than 30% of the holdings may be sold during the first 30 days after clearance for trading and no more than 25% of the remaining shares sold during any subsequent 30-day period. The notes are secured by a Security Agreement, require common shares to be reserved, are transferrable and are Senior to other debt of the Company. At maturity, on May 31, 2020, (i) the Company received forbearance agreements for the two tranches of $225,000 each whereby the maturity date was extended to July 15, 2020 and the interest rate was increased to 9%; and (ii) the $50,000 note and all accrued interest thereon, in the amount of $747, was forgiven. Accordingly, the Company recognized a gain for debt forgiveness of $50,747. As of May 31, 2020, the carrying value of the notes was $450,000 and accrued interest payable was $10,750. On February 12, 2020, the Company entered into an Independent Consulting Agreement with a consultant to provide services from February 12, 2020 through December 14, 2020 (the “Consulting Agreement”). Pursuant to the Consulting Agreement, the Company issued to the consultant a Compensation promissory note having a principal amount of $100,000 for the Deferred Compensation portion of the Consulting Agreement. The note matures August 4, 2020 and bears interest at the rate of 8% per annum. In the event, the note is not paid within the Cash Repayment Period (prior to the Maturity Date), the note specifies the holder shall have two options for repayment including: [a] an Alternative Payment Stake Option equal to a 8.5% (or a pro-rated amount if the debt has been partially paid) fully diluted ownership position in the Company after August 4, 2020; or [b] a Buy Out Option, anytime after the note has been outstanding for at least one year, equal to the total outstanding shares of the Company on the day of election, times 8.5% times the average closing price of the Company’s common stock over the preceding 30 trading days, times 40% (due and payable within 90 days). Anti-dilution rights are provided for five years on the Compensation note and for 182 days after conversion to an Alternative Payment Stake. The note includes a Leak Out provision, should the Alternative Payment Stake option be elected, whereby no more than 30% of the holdings may be sold during the first 30 days after clearance for trading and no more than 25% of the remaining shares sold during any subsequent 30-day period. The note is secured by a Security Agreement, requires common shares to be reserved, is transferrable and is Senior to other debt of the Company. As of May 31, 2020, the carrying value of the note was $100,000 and accrued interest payable was $2,389. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
May 31, 2020 | |
Related Party Transactions | |
Related Party Transactions | Note 8. Related Party Transactions In October 2017 – August 31, 2018, the Company incurred a related party debt in the amount of $10,000 to an entity related to the legal custodian of the Company for professional fees. As of August 31, 2018, this balance was forgiven and was included as part of the $168,048 Cancellation of Debt Income on the Statement of Operations. In November 30, 2017 – August 31, 2018, the Company issued a $35,554 in multiple notes payable to an entity related to the legal custodian of the Company. The notes payable bear interest at an annual rate of 10% and is convertible to common shares of the Company at $0.0001 per share. On May 8, 2018, $13,000 of the principal balance on notes payable were converted to common stock. The remaining principal balance was forgiven and included as Cancellation of Debt Income on the Income Statement for the year ended August 31, 2019. In March 2018 and May 2018, a legal custodian of the Company funded the Company $600 in advances. On August 31, 2018, this amount was reclassified as a note payable, that bears interest at an annual rate of 10% and is payable upon demand. In connection with the above notes, the Company recognized a beneficial conversion feature of $27,954, representing the intrinsic value of the conversion features at the time of issuance. This beneficial conversion feature was accreted to interest expense during the year ended August 31, 2018. On May 25, 2019, the Company issued two notes payable to Company directors Edward Manolos and Dan Nguyen for loans made to the Company, each in the amount of $16,666.67 for a total balance of $33,334. The notes bear interest at 5% per annum and do not have a fixed payment schedule or maturity date. These notes are additionally described herein in Footnote 7 - Notes Payable. On July 1, 2019, the Company acquired Action Nutraceuticals, Inc., a company owned by our current CEO, Arman Tabatabaei for one thousand dollars ($1,000). On July 9, 2019, the Company, through its Action Nutraceuticals subsidiary, loaned, Split Tee, LLC (“Split Tee”), a venture associated with Director Edward Manolos, $20,000 to engage in an exploratory research project. An additional $20,000 was supplied to Split Tee on August 23, 2019 (the “Split Tee Note”). The loans carry interest at the rate of 10% per annum and are due in one year for issuance. In addition, The Company, via Action Nutraceuticals subsidiary, invoiced Split Tee $5,000 as a consulting fee. Because of Mr. Manolos’ association as a director, the Company believes these transactions are defined by 17 CFR § 229.404 - (Item 404) Transactions with related persons, promoters and certain control persons, which would require specific disclosures under the section cited. On May 15, 2020, the outstanding balance of the Split Tee Note was reduced via a payment of $15,000. During the three months ended February 29, 2020, the Company issued two convertible promissory notes having an aggregate principal amount of $133,101 in exchange for accrued expenses owed to related parties, of which $79,333 is payable to the Company’s Chief Executive Officer and $53,768 is payable to the Company’s previous Chief Financial Officer, Robert L. Hymers III. The notes mature two years from the respective issuance date and bear interest at the rate of 10% per annum, payable at maturity. The noteholders shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at a variable conversion price of 50% of the average of the previous twenty (20) trading day closing prices of the Company’s common stock, subject to adjustment. As a result of the variable conversion prices, upon issuance, the Company recognized total debt discount of $133,101, which is being amortized to interest expense over the term of the notes. On May 22, 2020, Mr. Tabatabaei converted the principal amount of $79,333 and interest of 2,608.33, for a total amount of $81,941.55 into 694,902 common shares. As of May 31, 2020, the carrying value of the notes was $19,021, net of debt discount of $114,080 and accrued interest was $3,782. On April 30, 2020, the Company entered into a settlement agreement with Robert L. Hymers III, its Chief Financial Officer (the “CFO”), whereby the CFO resigned and the Company issued a promissory note for $30,000, which represented the remaining amount owed to the CFO for services rendered. The note matures December 31, 2020 and bears interest at the rate of 10% per annum, payable at maturity. The noteholder has the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at a fixed conversion price of $0.02 per share, subject to adjustment. As a result of the beneficial conversion price, upon issuance, the Company recognized debt discount of $30,000, which is being amortized to interest expense over the term of the note. As of May 31, 2020, the carrying value of the note was $3,796, net of debt discount of $26,204 and accrued interest was $255. Upon the issuance of the convertible promissory notes with variable conversion prices, the Company determined that the features associated with the embedded conversion option embedded in the debentures should be accounted for at fair value, as a derivative liability, as the Company cannot determine if a sufficient number of shares would be available to settle all potential future conversion transactions. At the issuance date of the convertible notes payable, the Company estimated the fair value of the embedded derivatives of $1,038,111 using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 389.94% to 398.53%, (3) risk-free interest rate of 0.16% to 1.60%, (4) expected life of one to three years and (5) estimated fair value of the Company’s common stock of $0.17 to $1.07 per share. On May 31, 2020, the Company estimated the fair value of the embedded derivatives of $2,189,684 using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 395.12%, (3) risk-free interest rate of 0.16% to 0.17%, (4) expected life of 0.57 to 1.75 years, and (5) estimated fair value of the Company’s common stock of $0.55 per share. |
Income Taxes
Income Taxes | 9 Months Ended |
May 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9. Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets at May 31, 2020 and August 30, 2019, are as follows: May 31 , 2020 August 30, Deferred tax assets: Net operating loss carryforwards $ 1,184,941 $ 212,618 Capitalized research and development — — Research and development credit carry forward 1,963 1,963 Total deferred tax assets 1,182,978 214,581 Less: valuation allowance (1,182,978 ) (214,581 ) Net deferred tax asset $ — $ — The net increase in the valuation allowance for deferred tax assets was $968,397 for the nine months ended May 31, 2020. The Company evaluates its valuation allowance on an annual basis based on projected future operations. When circumstances change and this causes a change in management’s judgment about the realizability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current operations. For federal income tax purposes, the Company has net U.S. operating loss carry forwards at May 31, 2020 available to offset future federal taxable income, if any, of $4,597,902 which will fully expire by the fiscal year ended May 31, 2040. Accordingly, there is no current tax expense for the nine months ended May 31, 2020. In addition, the Company has research and development tax credit carry forwards of $1,923 at May 31, 2020, which are available to offset federal income taxes and fully expire by May 31, 2040. The utilization of the tax net operating loss carry forwards may be limited due to ownership changes that have occurred as a result of sales of common stock. The effects of state income taxes were insignificant for the nine months ended May 31, 2020 and May 31, 2019. |
Convertible Note Payable
Convertible Note Payable | 9 Months Ended |
May 31, 2020 | |
Notes to Financial Statements | |
Convertible Note Payable | Note 10. Convertible Notes Payable On November 6, 2019, the Company issued a convertible promissory note in the principal amount of $20,000 along with 26,667 three-year warrants exercisable at $3.50 per share in exchange for proceeds of $20,000. The note matures May 6, 2020 and bears interest at the rate of 7% per annum, payable at maturity. Commencing thirty (30) days following the issuance date, the noteholder shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at a conversion price equal to the lower of (i) $0.75 per share; or (ii) 80% of the average of the previous twenty (20) trading day closing prices of the Company’s common stock, subject to adjustment. As a result of the issuance of the warrants as well as the beneficial conversion feature, upon issuance, the Company recognized total debt discount of $20,000, which is being amortized to interest expense over the term of the note. The Company is prohibited from effecting a conversion of the note to the extent that, as a result of such conversion, the noteholder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note. At maturity, on May 6, 2020, the Company entered into a settlement agreement with the noteholder whereby the Company paid the entire principal balance of $20,000 and accrued interest of $712 in cash and the warrants were canceled. There was no gain or loss recognized for the settlement. During the three months ended February 29, 2020, the Company issued four convertible promissory notes having an aggregate principal amount of $256,500, aggregate original issue discount (OID) of $10,500, and aggregate legal fees of $11,000, resulting in aggregate net proceeds to the Company of $235,000. The notes mature in one year from the respective issuance date and bear interest at the rate of 10% per annum, payable at maturity. Commencing one hundred eighty (180) days following the issuance date of $198,750 of the notes and commencing immediately following the issuance of $57,750 of the notes, the noteholders shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at variable conversion prices ranging from 50% - 60% of the lowest previous fifteen (15) to twenty (20) trading day closing trade prices of the Company’s common stock, subject to adjustment. As a result of the variable conversion prices, upon issuance, the Company recognized total debt discount of $256,500, which is being amortized to interest expense over the term of the notes. The Company is prohibited from effecting a conversion of the note to the extent that, as a result of such conversion, the noteholder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note. As of May 31, 2020, the carrying value of the notes was $91,894, net of debt discount of $164,606 and accrued interest was $9,215. On March 19, 2020, the Company issued a convertible promissory note, payable in tranches, having an aggregate principal amount of $150,000, aggregate original issue discount (OID) of $15,000, and an aggregate of 468,750 three-year warrants exercisable at $0.48/share. The notes mature one year from the respective issuance date of each tranche and bear interest at the rate of 10% per annum, payable at maturity. Commencing immediately following the issuances, the noteholder shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at a variable conversion price equal to the lower of 60% of the lowest closing trade price of the Company’s common stock, subject to adjustment, during the 25 trading days prior to: (i) the issuance date; or (ii) the conversion date. On March 19, 2020, the first tranche of $50,000, less OID of $5,000, was received, resulting in net proceeds to the Company of $45,000, and the Company issued 156,250 three-year warrants exercisable at $0.48 per share. On May 4, 2020, the second tranche of $25,000, less OID of $2,500, was received, resulting in net proceeds to the Company of $22,500, and the Company issued 78,125 three-year warrants exercisable at $0.48 per share. As a result of the OID and the variable conversion price, upon issuance, the Company recognized total debt discount of $75,000, which is being amortized to interest expense over the respective term of the tranches. The Company is prohibited from effecting a conversion of the note to the extent that, as a result of such conversion, the noteholder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note. As of May 31, 2020, the carrying value of the note was $11,849, net of debt discount of $63,151 and accrued interest was $1,185. Related Parties During the three months ended February 29, 2020, the Company issued two convertible promissory notes having an aggregate principal amount of $133,101 in exchange for accrued expenses owed to related parties, of which $79,333 is payable to the Company’s Chief Executive Officer and $53,768 is payable to the Company’s Chief Financial Officer (Robert L. Hymers III). The notes mature two years from the respective issuance date and bear interest at the rate of 10% per annum, payable at maturity. The noteholders shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at a variable conversion price of 50% of the average of the previous twenty (20) trading day closing prices of the Company’s common stock, subject to adjustment. As a result of the variable conversion prices, upon issuance, the Company recognized total debt discount of $133,101, which is being amortized to interest expense over the term of the notes. On May 22, 2020, the Chief Executive Officer converted $79,333 in principal and $2,608 of accrued interest into 694,902 shares of common stock to be issued having a fair value of $232,792. The conversion resulted in the elimination of $70,313 of remaining debt discount, the elimination of $231,632 of derivative liabilities, and a $10,468 gain on conversion that resulted from a related party and was therefore included in Additional paid-in capital. As of May 31, 2020, the carrying value of the note to the former Chief Financial Officer (see below) was $9,023, net of debt discount of $44,745 and accrued interest was $1,782. On April 30, 2020, the Company entered into a settlement agreement with its Chief Financial Officer (Robert L. Hymers III, hereinafter referred to as the “CFO”) whereby the CFO resigned and the Company issued a promissory note for $30,000, which represented the remaining amount owed to the CFO for services rendered. The note matures December 31, 2020 and bears interest at the rate of 10% per annum, payable at maturity. The noteholder has the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at a fixed conversion price of $0.02 per share, subject to adjustment. As a result of the beneficial conversion price, upon issuance, the Company recognized debt discount of $30,000, which is being amortized to interest expense over the term of the note. As of May 31, 2020, the carrying value of the note was $3,796, net of debt discount of $26,204 and accrued interest was $255. Upon the issuance of the convertible promissory notes with variable conversion prices, the Company determined that the features associated with the embedded conversion option embedded in the debentures should be accounted for at fair value, as a derivative liability, as the Company cannot determine if a sufficient number of shares would be available to settle all potential future conversion transactions. At the issuance date of the convertible notes payable, the Company estimated the fair value of the embedded derivatives of $1,038,111 using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 389.94% to 398.53%, (3) risk-free interest rate of 0.16% to 1.60%, and (4) expected life of one to three years. On May 31, 2020, the Company estimated the fair value of the embedded derivatives of $2,189,684 using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 395.12%, (3) risk-free interest rate of 0.16% to 0.17%, and (4) expected life of 0.57 to 1.75 years. |
Derivative Liability and Fair V
Derivative Liability and Fair Value Measurements | 9 Months Ended |
May 31, 2020 | |
Notes to Financial Statements | |
Derivative Liability and Fair Value Measurements | Note 11. Derivative Liability and Far Value Measurement determined that the features associated with the embedded conversion option embedded in the debentures should be accounted for at fair value, as a derivative liability, as the Company cannot determine if a sufficient number of shares would be available to settle all potential future conversion transactions. At the issuance date of the convertible notes payable, the Company estimated the fair value of the embedded derivatives of $1,038,111 using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 389.94% to 398.53%, (3) risk-free interest rate of 0.16% to 1.60%, and (4) expected life of one to three years. On May 31, 2020, the Company estimated the fair value of the embedded derivatives of $2,189,684 using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 395.12%, (3) risk-free interest rate of 0.16% to 0.17%, and (4) expected life of 0.57 to 1.75 years. The Company adopted the provisions of ASC 825-10, Financial Instruments (“ASC 825-10”). ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value: · Level 1 — Observable inputs that reflect quoted market prices (unadjusted) for identical assets and liabilities in active markets; · Level 2 — Observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities; and · Level 3 — Unobservable inputs that are supported by little or no market activity that are significant to the fair value of assets or liabilities. All items required to be recorded or measured on a recurring basis are based upon Level 3 inputs. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement. The Company recognizes its derivative liabilities as Level 3 and values its derivatives using the methods discussed below. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using the methods discussed are that of volatility and market price of the underlying common stock of the Company. As of May 31, 2020, the Company did not have any derivative instruments that were designated as hedges. Items recorded or measured at fair value on a recurring basis in the accompanying financial statements consisted of the following items as of May 31, 2020 and August 31, 2019: May 31, Quoted Significant Significant Derivative liability $ 1,903,234 $ — $ — $ 1,903,234 August 31, Quoted Significant Significant Derivative liability $ — $ — $ — $ — The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities for the nine months ended May 31, 2020: Balance, August 31, 2019 $ — Transfers in due to issuance of convertible promissory notes 1,038,111 Transfers out due to conversions of convertible promissory notes (231,632 ) Mark to market to May 31, 2020 1,096,755 Balance, May 31, 2020 $ 1,903,234 Loss on change in derivative liability for the nine months ended May 31, 2020 ($ 1,096,755 ) Fluctuations in the Company’s stock price are a primary driver for the changes in the derivative valuations during each reporting period. As the stock price increases for each of the related derivative instruments, the value to the holder of the instrument generally increases, therefore increasing the liability on the Company’s balance sheet. Additionally, stock price volatility is one of the significant unobservable inputs used in the fair value measurement of each of the Company’s derivative instruments. The simulated fair value of these liabilities is sensitive to changes in the Company’s expected volatility. Increases in expected volatility would generally result in higher fair value measurement. A 10% change in pricing inputs and changes in volatilities and correlation factors would not result in a material change in our Level 3 fair value. |
Subsequent Events
Subsequent Events | 9 Months Ended |
May 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12. Subsequent Events On June 30, 2020, the Company’s Board of Directors extended the Executive Employment Agreement for the Company’s CEO and CFO, Arman Tabatabaei for a term of one (1) additional year. Under the terms of the extension, Mr. Tabatabaei’s monthly salary was increased to $6,500. A copy of the unanimous resolution of the Board of Directors is included as an exhibit. On June 29, 2020, we sold 289,301 common shares registering in the direct offering under its From S-1 made effective by the SEC June 16, 2019, to an accredited investor in exchange for $50,000. The agreements are included as exhibits. On June 15, 2020, the Company and Lelantos Biotech, Inc., a Wyoming corporation (“Lelantos”), entered into a modification agreement respecting a February 12, 2020 material definitive agreement between the parties, a copy of which is included as an exhibit. The February 12, 2020 material definitive agreement required the Company to issue 400,000 shares of its common stock to Lelantos, and separately, an aggregate of $500,000 in the form of notes payable as follows: $225,000 to Ma Helen M. Am Is, Inc., a Wyoming corporation (“Helen M.”); $50,000 to East West Pharma Group, Inc., a Wyoming corporation (“East West”); and $225,000 to New Horizons Laboratory Services, Inc., a Wyoming corporation (“New Horizons”), in exchange for all right, title and interest in trade secrets, intellectual property rights, and research and development owned by Lelantos. The notes matured on May 31, 2020. On May 20, 2020, we issued 1,100,000 common shares to a Pinnacle Consulting Services Inc. for consulting service provided to the Company. The agreement is attached hereto. A copy of the agreement is attached hereto. These shares were registered in the S-1 that was filed on June 5, 2020 and was declared effective by the Commission on June 22, 2020. On May 20, 2020, we issued 1,000,000 common shares to a Tabular Investments LLC for consulting service provided to the Company. A copy of the agreement is attached hereto. Five Hundred Thousand shares (500,000) were registered in the S-1 that was filed on June 5, 2020 and was declared effective by the Commission on June 22, 2020. On May 30, 2020, the Company, New Horizons and Helen M. entered into forbearance agreements concerning their respective notes payable. The forbearance agreements resulted in new notes amending the maturity dates to November 15, 2020 and the interest rates were increased to 9%. On May 31, 2020, the Company and East West agreed to cancel the $50,000 note. All principal and interest were forgiven. The Company did not incur any penalty or other costs associated with the cancellation of the East West note. On June 15, 2020, the Company, Lelantos, New Horizons Helen M. entered into a modification agreement which resulted in the cancellation of all outstanding notes, as amended, and the obligation to issue 400,000 shares to Lelantos under the acquisition agreement. The Company agreed, in exchange for its acquisition of Lelantos’ intellectual properties, trade secrets and provision patent filings, to pay a $500,000 purchase price by the issuance of a promissory note. On June 5, 2020, we filed Form S-1 registration for the resale of up to 4,473,940 shares from certain selling holders and for the sale 3,775,163 newly issued common stock as part of a primary offering from the Company. The S-1 registration was declared effective by the Commission on June 22, 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
May 31, 2020 | |
Accounting Policies [Abstract] | |
Derivative Instruments | Derivative Instruments The fair value of derivative instruments is recorded and shown separately under current liabilities. Changes in the fair value of derivatives liability are recorded in the consolidated statement of operations under non-operating income (expense). Our Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, the Company uses a weighted average Binomial option-pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. |
Consolidation | Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Action Nutraceuticals, Inc. and Aidan & Co, Inc. All intercompany balances and transactions have been eliminated in consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents are held in operating accounts at a major financial institution. |
Inventory | Inventory Inventory is primarily comprised of work in progress. Inventory is valued at cost, based on the specific identification method, unless and until the market value for the inventory is lower than cost, in which case an allowance is established to reduce the valuation to market value. As of May 31, 2020, and May 31, 2019, market values of all of our inventory were at cost, and accordingly, no such valuation allowance was recognized. |
Deposits | Deposits Deposits is comprised of advance payments made to third parties, primarily for inventory for which we have not yet taken title. When we take title to inventory for which deposits are made, the related amount is classified as inventory, then recognized as a cost of revenues upon sale (see “Costs of Revenues” below). There were no deposits as of May 31, 2020 or May 31, 2019. |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets is primarily comprised of advance payments made to third parties for independent contractors’ services or other general expenses. Prepaid services and general expenses are amortized over the applicable periods, which approximate the life of the contract or service period. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded at the net value of face amount less any allowance for doubtful accounts. On a periodic basis, we evaluate our accounts receivable and, based on a method of specific identification of any accounts receivable for which we deem the net realizable value to be less than the gross amount of accounts receivable recorded, we establish an allowance for doubtful accounts for those balances. In determining our need for an allowance for doubtful accounts, we consider historical experience, analysis of past due amounts, client creditworthiness and any other relevant available information. However, our actual experience may vary from our estimates. If the financial condition of our clients were to deteriorate, resulting in their inability or unwillingness to pay our fees, we may need to record additional allowances or write-offs in future periods. This risk is mitigated to the extent that we collect retainers from our clients prior to performing significant services. The allowance for doubtful accounts, if any, is recorded as a reduction in revenue to the extent the provision relates to fee adjustments and other discretionary pricing adjustments. To the extent the provision relates to a client's inability to make required payments on accounts receivables, the provision is recorded in operating expenses. As of May 31, 2020, and May 31, 2019, we had $0 and $0 allowance for doubtful accounts, respectively. |
Property and Equipment, net | Property and Equipment, net Property and Equipment is stated at net book value, cost less depreciation. Maintenance and repairs are expensed as incurred. Depreciation of owned equipment is provided using the straight-line method over the estimated useful lives of the assets, ranging from two to seven years. Depreciation of capitalized construction in progress costs, a component of property and equipment, net, begins once the underlying asset is placed into service and is recognized over the estimated useful life. Property and equipment are reviewed for impairment as discussed below under “Accounting for the Impairment of Long-Lived Assets.” |
Accounting for the Impairment of Long-Lived Assets | Accounting for the Impairment of Long-Lived Assets We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Upon such an occurrence, recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to forecasted undiscounted net cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. For long-lived assets held for sale, assets are written down to fair value, less cost to sell. Fair value is determined based on discounted cash flows, appraised values or management's estimates, depending upon the nature of the assets. We have not recorded any impairment charges related to long-lived assets during the quarter ended May 31, 2020 and May 21, 2019. |
Beneficial Conversion Feature | Beneficial Conversion Feature If the conversion features of conventional convertible debt provides for a rate of conversion that is below market value at issuance, this feature is characterized as a beneficial conversion feature (“BCF”). We record a BCF as a debt discount pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ACF”) Topic 470-20 Debt with Conversion and Other Options |
Revenue Recognition | Revenue Recognition For annual reporting periods after December 15, 2017, the Financial Accounting Standards Board (“FASB”) made effective ASU 2014-09 “Revenue from Contracts with Customers” to supersede previous revenue recognition guidance under current U.S. GAAP. Revenue is now recognized in accordance with FASB ASC Topic 606, Revenue Recognition. The guidance presents a single five-step model for comprehensive revenue recognition that requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Two options are available for implementation of the standard which is either the retrospective approach or cumulative effect adjustment approach. The guidance becomes effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. We determined to implement the cumulative effect adjustment approach to our implementation of FASB ASC Topic 606, with no restatement of the comparative periods presented. We intend to apply this method to any incomplete contracts we determine are subject to FASB ASC Topic 606 prospectively. As is more fully discussed below, we are of the opinion that none of our contracts for products contain significant financing components that require revenue adjustment under FASB ASC Topic 606. In accordance with FASB ASC Topic 606, Revenue Recognition, we will recognize revenue when persuasive evidence of a significant financing component exists in our product sales contracts. We examine and evaluate when our customers become liable to pay for goods; how much consideration is paid as compared to the cash selling price of the goods; and, the length of time between our performance and the receipt of payment. |
Product Sales | Product Sales Revenue from product sales, including delivery fees, is recognized when an order has been obtained from the customer, the price is fixed and determinable when the order is placed, the product is shipped, and collectability is reasonably assured. Generally, we drop-ship orders to our clients with shipping-point or destination terms. For any shipments with destination terms, the Company defers revenue until delivery to the customer. Given the facts that (1) our customers exercise discretion in determining the timing of when they place their product order; and, (2) the price negotiated in our product sales is fixed and determinable at the time the customer places the order, we are not of the opinion that our product sales indicate or involve any significant customer financing that would materially change the amount of revenue recognized under the sales transaction, or would otherwise contain a significant financing component for us or the customer under FASB ASC Topic 606. |
Costs of Revenues | Costs of Revenues Our policy is to recognize the costs of revenue in the same manner in conjunction with revenue recognition. Costs of revenues include the costs directly attributable to revenue recognition and include compensation and fees for services, travel and other expenses for services and costs of products and equipment. Selling, general and administrative expenses are charged to expense as incurred. |
Stock-Based Compensation | Stock-Based Compensation Restricted shares are awarded to employees and entitle the grantee to receive shares of restricted common stock at the end of the established vesting period. The fair value of the grant is based on the stock price on the date of grant. We recognize related compensation costs on a straight-line basis over the requisite vesting period of the award, which to date has been one year from the grant date. |
Income Taxes | Income Taxes We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns in accordance with applicable accounting guidance for accounting for income taxes, using currently enacted tax rates in effect for the year in which the differences are expected to reverse. We record a valuation allowance when necessary to reduce deferred tax assets to the amount expected to be realized. For the quarterly reporting periods ending May 31, 2020, and May 31, 2019, we incurred no income taxes and had no liabilities related to federal or state income taxes. |
Loss Contingencies | Loss Contingencies From time to time the Company is subject to various legal proceedings and claims that arise in the ordinary course of business. On at least a quarterly basis, consistent with ASC 450-20-50-1C, if the Company determines that there is a reasonable possibility that a material loss may have been incurred, or is reasonably estimable, regardless of whether the Company accrued for such a loss (or any portion of that loss), the Company will confer with its legal counsel, consistent with ASC 450. If the material loss is determinable or reasonably estimable, the Company will record it in its accounts and as a liability on the balance sheet. If the Company determines that such an estimate cannot be made, the Company's policy is to disclose a demonstration of its attempt to estimate the loss or range of losses before concluding that an estimate cannot be made, and to disclose it in the notes to the financial statements under Contingent Liabilities. |
Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share We report net income (loss) per common share in accordance with FASB ASC 260, “Earnings per Share”. This statement requires dual presentation of basic and diluted earnings with a reconciliation of the numerator and denominator of the earnings per share computations. Basic net income (loss) per share is computed by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period and excludes the effects of any potentially dilutive securities. Diluted net income (loss) per share gives effect to any dilutive potential common stock outstanding during the period. The computation does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings. |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
May 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Deferred income taxes | Significant components of the Company’s deferred tax assets at May 31, 2020 and August 30, 2019, are as follows: May 31 , 2020 August 30, Deferred tax assets: Net operating loss carryforwards $ 1,184,941 $ 212,618 Capitalized research and development — — Research and development credit carry forward 1,963 1,963 Total deferred tax assets 1,182,978 214,581 Less: valuation allowance (1,182,978 ) (214,581 ) Net deferred tax asset $ — $ — |
Derivative Liability and Fair_2
Derivative Liability and Fair Value Measurements (Tables) | 9 Months Ended |
May 31, 2020 | |
Notes to Financial Statements | |
Fair Value, Assets Measured on Recurring Basis | Items recorded or measured at fair value on a recurring basis in the accompanying financial statements consisted of the following items as of May 31, 2020 and August 31, 2019: May 31, Quoted Significant Significant Derivative liability $ 1,903,234 $ — $ — $ 1,903,234 August 31, Quoted Significant Significant Derivative liability $ — $ — $ — $ — |
Summary of changes in fair value of Level 3 financial liabilities | The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities for the nine months ended May 31, 2020: Balance, August 31, 2019 $ — Transfers in due to issuance of convertible promissory notes 1,038,111 Transfers out due to conversions of convertible promissory notes (231,632 ) Mark to market to May 31, 2020 1,096,755 Balance, May 31, 2020 $ 1,903,234 Loss on change in derivative liability for the nine months ended May 31, 2020 ($ 1,096,755 ) |
Organization and Description _2
Organization and Description of Business (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||||||
Feb. 16, 2020 | May 25, 2019 | Sep. 25, 2007 | May 31, 2020 | Feb. 29, 2020 | Nov. 30, 2019 | Aug. 31, 2019 | Aug. 22, 2007 | |
Common stock, par or stated value per share (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.0001 | |||||
Common stock, shares authorized | 290,000,000 | 290,000,000 | 300,000,000,000,000 | |||||
Common stock, shares issued | 1,000,000 | 17,066,096 | 12,524,307 | |||||
Common stock, shares outstanding | 1,000,000 | 17,066,096 | 12,524,307 | |||||
Preferred stock, shares issued | 0 | 8,000,000 | 8,000,000 | |||||
Preferred stock, shares outstanding | 0 | 8,000,000 | 8,000,000 | |||||
Forward split | 538,646 for 1 | |||||||
Controlling interest description | Lauderdale Holdings, LLC, a Florida limited liability company, in which former Chief Executive Officer, Garry McHenry maintains a controlling interest, sold 8,666,667 common shares of MCTC Holdings, Inc., representing approximately 70.7% of the 12,257,640 issued and outstanding shares to Messrs. Robert Hymers, Edward Manolos and Dan Nguyen, all of whom were previously unaffiliated parties. Each purchased 2,888,889 common shares for $108,333.33 each or an aggregate of $325,000, utilizing personal funds. This series of transactions constitute a change in control of the Company. The assets and liabilities of MicroChannel Corp. were spun out to Lauderdale Holdings, LLC as part of the change in control. | |||||||
Stock issued for research and development, value | $ 737,325 | |||||||
Notes payable cancelled | $ 50,000 | |||||||
Lelantos | ||||||||
Stock issued for research and development, shares | 400,000 | |||||||
Stock issued for research and development, value | $ 500,000 |
Going Concern Uncertainties (De
Going Concern Uncertainties (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | Aug. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Accumulated Deficit | $ (5,023,803) | $ (5,023,803) | $ (1,127,601) | ||
Net Loss | (2,748,569) | $ 1,531 | (3,896,202) | $ (23,095) | |
Net Cash Used in Operating Activities | (1,054,985) | (33,156) | |||
Revenues | $ 19,750 | $ 0 | $ 29,753 | $ 0 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 9 Months Ended | |
May 31, 2020 | May 31, 2019 | |
Accounting Policies [Abstract] | ||
Deposits | $ 0 | $ 0 |
Allowance for doubtful accounts | 0 | 0 |
Impairment charges | 0 | 0 |
Stock-based compensation | 0 | 0 |
Income taxes | $ 0 | $ 0 |
Net Loss Per Share (Details Nar
Net Loss Per Share (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (2,748,569) | $ 1,531 | $ (3,896,202) | $ (23,095) |
Earnings per share | $ (0.22) | $ 0 | $ (0.03) | $ 0 |
Weighted average common shares outstanding | 12,549,491 |
Notes Receivable - Related Pa_2
Notes Receivable - Related Party (Details Narrative) - USD ($) | Jul. 09, 2019 | May 22, 2020 | Apr. 30, 2020 | May 31, 2020 | May 31, 2019 | Feb. 29, 2020 | Aug. 31, 2019 | Aug. 23, 2019 | May 25, 2019 |
Beneficial Conversion Feature | $ 27,954 | ||||||||
Fair value of the embedded derivatives | $ 2,189,684 | ||||||||
Dividend yield | 0.00% | ||||||||
Expected volatility | 395.12% | ||||||||
Estimated fair value of common stock | $ 0.55 | ||||||||
Accrued interest payable | $ 25,576 | $ 0 | |||||||
Minimum [Member] | |||||||||
Risk-free interest rate | 0.16% | ||||||||
Expected life (in years) | 6 months 25 days | ||||||||
Maximum [Member] | |||||||||
Risk-free interest rate | 0.17% | ||||||||
Expected life (in years) | 1 year 9 months | ||||||||
Convertible Notes Payable [Member] | |||||||||
Fair value of the embedded derivatives | $ 1,038,111 | ||||||||
Dividend yield | 0.00% | ||||||||
Convertible Notes Payable [Member] | Minimum [Member] | |||||||||
Expected volatility | 389.94% | ||||||||
Risk-free interest rate | 0.16% | ||||||||
Expected life (in years) | 1 year | ||||||||
Estimated fair value of common stock | $ 0.17 | ||||||||
Convertible Notes Payable [Member] | Maximum [Member] | |||||||||
Expected volatility | 398.53% | ||||||||
Risk-free interest rate | 1.60% | ||||||||
Expected life (in years) | 3 years | ||||||||
Estimated fair value of common stock | $ 1.07 | ||||||||
Two Convertible Promissory Notes | |||||||||
Principal amount | $ 133,101 | ||||||||
Interest expense | $ 133,101 | ||||||||
Interest rate | 10.00% | ||||||||
Carrying value | $ 114,080 | ||||||||
Debt discount | 19,021 | ||||||||
Accrued interest payable | 3,782 | ||||||||
Chief Financial Officer [Member] | |||||||||
Notes Receivable | $ 30,000 | 26,204 | |||||||
Maturity date | Dec. 31, 2020 | ||||||||
Interest rate | 10.00% | ||||||||
Conversion price | $ 0.02 | ||||||||
Beneficial Conversion Feature | $ 30,000 | ||||||||
Accrued interest | 255 | ||||||||
Carrying value | 26,204 | ||||||||
Debt discount | 3,796 | ||||||||
Accrued interest payable | $ 255 | ||||||||
Edward Manolos | |||||||||
Note Payable | $ 1,666,667 | ||||||||
Interest Rate | 5.00% | ||||||||
Dan Nguyen | |||||||||
Note Payable | $ 1,666,667 | ||||||||
Interest Rate | 5.00% | ||||||||
Tabatabaei | Two Convertible Promissory Notes | |||||||||
Conversion of Stock, Amount Converted | $ 81,941 | ||||||||
Conversion of Stock, Shares Converted | 694,902 | ||||||||
Tabatabaei | Two Convertible Promissory Notes | Principal | |||||||||
Conversion of Stock, Amount Converted | $ 79,333 | ||||||||
Tabatabaei | Two Convertible Promissory Notes | Interest | |||||||||
Conversion of Stock, Amount Converted | $ 2,608 | ||||||||
Split Tee | |||||||||
Notes Receivable | $ 20,000 | $ 20,000 | |||||||
Interest rate | 10.00% | ||||||||
Consulting fee | $ 5,000 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Feb. 16, 2020 | May 31, 2020 | Feb. 29, 2020 | Nov. 30, 2019 | |
Stock issued for research and development, value | $ 737,325 | |||
Notes payable cancelled | $ 50,000 | |||
Lelantos | ||||
Stock issued for research and development, shares | 400,000 | |||
Stock issued for research and development, value | $ 500,000 |
Note Payable (Details Narrative
Note Payable (Details Narrative) - USD ($) | Feb. 12, 2020 | May 31, 2020 | Aug. 31, 2019 |
Accrued interest payable | $ 25,576 | $ 0 | |
Sellers Acquisition Promissory Notes | |||
Principal amount | $ 500,000 | ||
Interest rate | 8.00% | ||
Maturity date | May 31, 2020 | ||
Carrying value | 500,000 | ||
Gain for debt forgiveness | 50,747 | ||
Accrued interest payable | 10,750 | ||
Compensation Promissory Note | Consulting Agreement | Consultant | |||
Principal amount | $ 100,000 | ||
Interest rate | 8.00% | ||
Maturity date | Aug. 4, 2020 | ||
Carrying value | 100,000 | ||
Accrued interest payable | $ 2,389 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jul. 09, 2019 | May 08, 2018 | May 22, 2020 | Apr. 30, 2020 | May 31, 2018 | May 31, 2020 | May 31, 2019 | Aug. 31, 2018 | Feb. 29, 2020 | Aug. 31, 2019 | Aug. 23, 2019 | May 25, 2019 |
Notes Payable, Related Party | $ 35,500 | $ 14,000 | ||||||||||
Gain on Debt Cancellation | 168,048 | |||||||||||
Beneficial conversion feature | $ 27,954 | |||||||||||
Accrued interest payable | 25,576 | $ 0 | ||||||||||
Fair value of the embedded derivatives | $ 2,189,684 | |||||||||||
Dividend yield | 0.00% | |||||||||||
Expected volatility | 395.12% | |||||||||||
Estimated fair value of common stock | $ 0.55 | |||||||||||
Minimum [Member] | ||||||||||||
Risk-free interest rate | 0.16% | |||||||||||
Expected life (in years) | 6 months 25 days | |||||||||||
Maximum [Member] | ||||||||||||
Risk-free interest rate | 0.17% | |||||||||||
Expected life (in years) | 1 year 9 months | |||||||||||
Chief Financial Officer [Member] | ||||||||||||
Conversion Price | $ 0.02 | |||||||||||
Beneficial conversion feature | $ 30,000 | |||||||||||
Notes Receivable | $ 30,000 | $ 26,204 | ||||||||||
Interest rate | 10.00% | |||||||||||
Carrying value | 26,204 | |||||||||||
Debt discount | 3,796 | |||||||||||
Accrued interest payable | 255 | |||||||||||
Accrued interest | 255 | |||||||||||
Two Convertible Promissory Notes | ||||||||||||
Principal amount | $ 133,101 | |||||||||||
Interest expense | $ 133,101 | |||||||||||
Interest rate | 10.00% | |||||||||||
Carrying value | $ 114,080 | |||||||||||
Debt discount | 19,021 | |||||||||||
Accrued interest payable | 3,782 | |||||||||||
Convertible Notes Payable [Member] | ||||||||||||
Fair value of the embedded derivatives | $ 1,038,111 | |||||||||||
Dividend yield | 0.00% | |||||||||||
Convertible Notes Payable [Member] | Minimum [Member] | ||||||||||||
Expected volatility | 389.94% | |||||||||||
Risk-free interest rate | 0.16% | |||||||||||
Expected life (in years) | 1 year | |||||||||||
Estimated fair value of common stock | $ 0.17 | |||||||||||
Convertible Notes Payable [Member] | Maximum [Member] | ||||||||||||
Expected volatility | 398.53% | |||||||||||
Risk-free interest rate | 1.60% | |||||||||||
Expected life (in years) | 3 years | |||||||||||
Estimated fair value of common stock | $ 1.07 | |||||||||||
Split Tee | ||||||||||||
Notes Receivable | $ 20,000 | $ 20,000 | ||||||||||
Interest rate | 10.00% | |||||||||||
Consulting fee | $ 5,000 | |||||||||||
Legal Custodian | ||||||||||||
Notes Payable, Related Party | $ 10,000 | |||||||||||
Legal Custodian One | ||||||||||||
Notes Payable, Related Party | $ 35,554 | |||||||||||
Interest rate | 10.00% | |||||||||||
Conversion Price | $ 0.0001 | |||||||||||
Conversion of Stock, Amount Converted | $ 13,000 | |||||||||||
Legal Custodian Two | ||||||||||||
Notes Payable, Related Party | $ 600 | |||||||||||
Interest rate | 10.00% | |||||||||||
Advances | $ 600 | |||||||||||
Accrued interest payable | $ 0 | |||||||||||
Dan Nguyen | ||||||||||||
Note Payable | $ 1,666,667 | |||||||||||
Interest Rate | 5.00% | |||||||||||
Edward Manolos | ||||||||||||
Note Payable | $ 1,666,667 | |||||||||||
Interest Rate | 5.00% | |||||||||||
Tabatabaei | Two Convertible Promissory Notes | ||||||||||||
Conversion of Stock, Amount Converted | $ 81,941 | |||||||||||
Conversion of Stock, Shares Converted | 694,902 | |||||||||||
Tabatabaei | Two Convertible Promissory Notes | Principal | ||||||||||||
Conversion of Stock, Amount Converted | $ 79,333 | |||||||||||
Tabatabaei | Two Convertible Promissory Notes | Interest | ||||||||||||
Conversion of Stock, Amount Converted | $ 2,608 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 1,184,941 | $ 212,618 |
Capitalized research and development | 0 | 0 |
Research and development credit carry forward | 1,963 | 1,963 |
Total deferred tax assets | 1,182,978 | 214,581 |
Less: valuation allowance | (1,182,978) | (214,581) |
Net deferred tax asset | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | Aug. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Net increase in the valuation allowance of deferred tax assets | $ 968,397 | ||
Operating loss carry forwards | $ 4,597,902 | ||
Operating Loss Carryforwards, Expiration Date | May 31, 2040 | ||
Current tax expense | $ 0 | $ 0 | |
Research and development credit carry forward | $ 1,963 | $ 1,963 |
Convertible Note Payable (Detai
Convertible Note Payable (Details Narrative) - USD ($) | Nov. 06, 2019 | May 22, 2020 | Apr. 30, 2020 | Mar. 19, 2020 | May 31, 2020 | May 31, 2020 | May 31, 2019 | Feb. 29, 2020 | Aug. 31, 2019 |
Proceeds from Convertible debt | $ 691,269 | $ 0 | |||||||
Accrued interest payable | $ 25,576 | $ 25,576 | $ 0 | ||||||
Beneficial Conversion Feature | $ 27,954 | ||||||||
Dividend yield | 0.00% | ||||||||
Expected volatility | 395.12% | ||||||||
Minimum [Member] | |||||||||
Weighted average risk-free interest rate | 0.16% | ||||||||
Expected life (in years) | 6 months 25 days | ||||||||
Maximum [Member] | |||||||||
Weighted average risk-free interest rate | 0.17% | ||||||||
Expected life (in years) | 1 year 9 months | ||||||||
Former Chief Financial Officer [Member] | |||||||||
Carrying value | 44,745 | $ 44,745 | |||||||
Debt discount | 9,023 | 9,023 | |||||||
Accrued interest payable | 1,782 | 1,782 | |||||||
Chief Executive Officer [Member] | |||||||||
Principal amount | 79,333 | 79,333 | |||||||
Chief Financial Officer [Member] | |||||||||
Carrying value | 26,204 | 26,204 | |||||||
Debt discount | 3,796 | 3,796 | |||||||
Accrued interest payable | 255 | 255 | |||||||
Maturity date | Dec. 31, 2020 | ||||||||
Interest rate | 10.00% | ||||||||
Conversion price | $ 0.02 | ||||||||
Beneficial Conversion Feature | $ 30,000 | ||||||||
Convertible Promissory Note | |||||||||
Principal amount | $ 20,000 | ||||||||
Warrants exercisable | 26,667 | ||||||||
Exercisable Price | $ 3.50 | ||||||||
Proceeds from Warrant Exercises | $ 20,000 | ||||||||
Warrant expiration date | May 6, 2020 | ||||||||
Interest rate | 7.00% | ||||||||
Interest expense | $ 20,000 | ||||||||
Principal balance cancelled | 20,000 | 20,000 | |||||||
Accrued interest cancelled | 712 | 712 | |||||||
Fair value of embedded derivatives | $ 2,189,684 | ||||||||
Dividend yield | 0.00% | ||||||||
Expected volatility | 395.12% | ||||||||
Convertible Promissory Note | Minimum [Member] | |||||||||
Fair value of embedded derivatives | $ 1,038,111 | ||||||||
Dividend yield | 0.00% | ||||||||
Expected volatility | 389.94% | ||||||||
Weighted average risk-free interest rate | 0.16% | 0.86% | |||||||
Expected life (in years) | 1 year | 6 months 25 days | |||||||
Convertible Promissory Note | Maximum [Member] | |||||||||
Expected volatility | 398.53% | ||||||||
Weighted average risk-free interest rate | 0.17% | 1.37% | |||||||
Expected life (in years) | 3 years | 1 year 9 months | |||||||
Convertible Promissory Note | |||||||||
Principal amount | $ 256,500 | ||||||||
Original issue discount | 10,500 | ||||||||
Legal fees | 11,000 | ||||||||
Proceeds from Convertible debt | $ 235,000 | ||||||||
Interest rate | 10.00% | ||||||||
Interest expense | $ 256,500 | ||||||||
Two Convertible Promissory Notes | |||||||||
Principal amount | $ 133,101 | ||||||||
Interest rate | 10.00% | ||||||||
Interest expense | $ 133,101 | ||||||||
Carrying value | 114,080 | 114,080 | |||||||
Debt discount | 19,021 | 19,021 | |||||||
Accrued interest payable | 3,782 | 3,782 | |||||||
Two Convertible Promissory Notes | Tabatabaei | |||||||||
Conversion of Stock, Amount Converted | $ 81,941 | ||||||||
Conversion of Stock, Shares Converted | 694,902 | ||||||||
Gain on conversion | $ 10,468 | ||||||||
Two Convertible Promissory Notes | Tabatabaei | Principal | |||||||||
Conversion of Stock, Amount Converted | 79,333 | ||||||||
Two Convertible Promissory Notes | Tabatabaei | Interest | |||||||||
Conversion of Stock, Amount Converted | $ 2,608 | ||||||||
Compensation Promissory Note | Securities Purchases Agreement [Member] | |||||||||
Interest rate | 10.00% | ||||||||
Carrying value | 63,151 | 63,151 | |||||||
Debt discount | 11,849 | 11,849 | |||||||
Accrued interest payable | $ 1,185 | $ 1,185 | |||||||
Convertible debt | $ 150,000 | ||||||||
Due date | Dec. 20, 2020 | ||||||||
Warrant grant term | 3 years | ||||||||
Warrant granted price | $ 0.48 | ||||||||
Beneficial ownership percentage | 4.99% |
Derivative Liability and Fair_3
Derivative Liability and Fair Value Measurements (Details) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Derivative liability | $ 1,903,234 | $ 0 |
Fair Value, Inputs, Level 1 [Member] | ||
Derivative liability | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Derivative liability | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Derivative liability | $ 1,903,234 | $ 0 |
Derivative Liability and Fair_4
Derivative Liability and Fair Value Measurements (Details 1) | 9 Months Ended |
May 31, 2020USD ($) | |
Notes to Financial Statements | |
Balance at beginning | $ 0 |
Transfers in due to issuance of convertible promissory notes | 1,038,111 |
Transfers out due to conversions of convertible promissory notes | (231,632) |
Mark to market | 1,096,755 |
Balance at end | 1,903,234 |
Gain on change in derivative liability | $ 1,096,755 |
Derivative Liability and Fair_5
Derivative Liability and Fair Value Measurements (Details Narrative) - USD ($) | Nov. 06, 2019 | May 31, 2020 |
Dividend yield | 0.00% | |
Expected volatility | 395.12% | |
Minimum [Member] | ||
Weighted average risk-free interest rate | 0.16% | |
Expected life (in years) | 6 months 25 days | |
Maximum [Member] | ||
Weighted average risk-free interest rate | 0.17% | |
Expected life (in years) | 1 year 9 months | |
Convertible Promissory Note | ||
Fair value of embedded derivatives | $ 2,189,684 | |
Dividend yield | 0.00% | |
Expected volatility | 395.12% | |
Convertible Promissory Note | Minimum [Member] | ||
Fair value of embedded derivatives | $ 1,038,111 | |
Dividend yield | 0.00% | |
Expected volatility | 389.94% | |
Weighted average risk-free interest rate | 0.16% | 0.86% |
Expected life (in years) | 1 year | 6 months 25 days |
Convertible Promissory Note | Maximum [Member] | ||
Expected volatility | 398.53% | |
Weighted average risk-free interest rate | 0.17% | 1.37% |
Expected life (in years) | 3 years | 1 year 9 months |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Jun. 05, 2020 | Jun. 30, 2020 | Jun. 29, 2020 | Jun. 15, 2020 | May 20, 2020 | Feb. 16, 2020 | May 31, 2020 | Feb. 29, 2020 | Nov. 30, 2019 |
Stock issued for research and development, value | $ 737,325 | ||||||||
Notes payable cancelled | $ 50,000 | ||||||||
Lelantos | |||||||||
Stock issued for research and development, shares | 400,000 | ||||||||
Stock issued for research and development, value | $ 500,000 | ||||||||
Pinnacle Consulting Services | |||||||||
Shares Issued for Services, Shares | 1,100,000 | ||||||||
Tabular Investments | |||||||||
Shares Issued for Services, Shares | 1,000,000 | ||||||||
Subsequent Event [Member] | |||||||||
Number of common stock sold | 4,473,940 | ||||||||
Number of common stock issued | 3,775,163 | ||||||||
Subsequent Event [Member] | Accredited investor | |||||||||
Common stock issued, Shares | 289,301 | ||||||||
Common stock issued, Amount | $ 50,000 | ||||||||
Subsequent Event [Member] | Lelantos | |||||||||
Common stock cancelled | 400,000 | ||||||||
Purchase price | $ 500,000 | ||||||||
Subsequent Event [Member] | Executive Employment Agreement [Member] | Tabatabaei | |||||||||
Monthly salary | $ 6,500 |