Document and Entity Information
Document and Entity Information | 9 Months Ended |
May 31, 2021 | |
Document And Entity Information | |
Entity Registrant Name | CANNABIS GLOBAL, INC. |
Entity Central Index Key | 0001413488 |
Document Type | S-1 |
Amendment Flag | false |
Entity Filer Category | Non-accelerated Filer |
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, 2021 | Aug. 31, 2020 | Aug. 31, 2019 |
Current Assets: | |||
Cash | $ 268,007 | $ 2,338 | $ 152,082 |
Accounts Receivable | 358,813 | 0 | |
Notes receivable, current | 100,800 | 0 | |
Inventory | 182,268 | 75,338 | 2,299 |
Total Current Assets | 909,888 | 77,676 | 154,381 |
Machinery & Equipment- Net | 1,433,408 | 25,406 | 13,248 |
Other Assets | |||
Long-Term Investments | 650,000 | 1,714,903 | 0 |
Intangible Assets | 500,000 | 500,000 | 0 |
Note Receivable | 41,000 | 0 | 40,000 |
Security Deposit | 7,200 | 7,200 | 7,200 |
Goodwill | 8,098,603 | 0 | |
TOTAL ASSETS | 12,247,405 | 2,325,185 | 214,829 |
Current Liabilities: | |||
Accounts Payable | 624,486 | 233,568 | 92,806 |
Accounts Payable - Related Party | 11,137 | 1,139 | 1,139 |
Accrued Interest | 209,843 | 33,301 | 0 |
Due to Joint Venture | 135,000 | 0 | |
Right of use liability, current | 62,063 | 0 | |
Notes payable, current | 995,043 | 0 | |
Accrued Professional and Legal Expenses | 0 | 5,885 | |
Accrued R&D Expenses | 0 | 6,250 | |
Convertible Notes, Net of Debt Discount of $678,246 and $0, respectively | 1,103,654 | 1,866,872 | 33,334 |
Derivative Liability | 3,585,535 | 1,125,803 | 0 |
Note Payable - Related Party | 613,617 | 499,788 | 14,000 |
Total Current Liabilities | 7,340,378 | 3,760,471 | 153,414 |
Right of use liability, long term | 545,243 | 0 | |
Notes payable | 786,001 | 0 | |
Total Liabilities | 8,671,622 | 3,760,471 | 153,414 |
Stockholder's Equity (Deficit) | |||
Preferred Stock, par value $0.0001, 10,000,000 shares Authorized, 6,000,000 shares Issued and Outstanding at November 30, 2020 and August 31, 2020 | 600 | 600 | 0 |
Common Stock, par value $0.001, 290,000,000 shares Authorized, 39,714,845 at November 30, 2020 and 27,082,419 shares Issued and Outstanding at August 31, 2020 | 78,731 | 2,708 | 1,253 |
Additional Paid-In Capital | 10,882,705 | 4,618,168 | 1,184,923 |
Shares to be issued | 1,360 | 187 | 2,840 |
Accumulated Deficit | (11,329,224) | (6,056,949) | (1,127,601) |
Total Stockholder's Equity (Deficit) attributable to Cannabis Global, Inc. | (365,828) | (1,435,286) | 61,415 |
Noncontrolling Interest | 3,941,611 | 0 | |
Total Stockholders' Equity (Deficit) | 3,575,783 | (1,435,286) | 61,415 |
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT) | $ 12,247,405 | $ 2,325,185 | $ 214,829 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | May 31, 2021 | Aug. 31, 2020 | Aug. 31, 2019 |
Statement of Financial Position [Abstract] | |||
Convertible Notes, Debt Discount Current | $ 1,772,267 | $ 678,246 | $ 0 |
Preferred stock, par or stated value per share (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 6,000,000 | 6,000,000 | 6,000,000 |
Preferred stock, shares outstanding | 6,000,000 | 6,000,000 | 6,000,000 |
Common stock, par or stated value per share (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 | 290,000,000 |
Common stock, shares issued | 78,733,317 | 27,082,419 | 12,524,307 |
Common stock, shares outstanding | 78,733,317 | 27,082,419 | 12,524,307 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
May 31, 2021 | May 31, 2020 | May 31, 2021 | May 31, 2020 | Aug. 31, 2020 | Aug. 31, 2019 | |
Revenues: | ||||||
Total Revenue | $ 940,491 | $ 19,750 | $ 970,717 | $ 29,753 | $ 27,004 | $ 0 |
Cost of Goods Sold | 729,589 | 16,788 | 737,542 | 19,688 | 24,521 | 0 |
Gross Profit | 210,902 | 2,962 | 233,175 | 10,065 | 2,483 | 0 |
Operating Expenses: | ||||||
Advertising fees | 16,234 | 80,705 | 66,758 | 96,399 | 213,302 | 1,155 |
Consulting services | 34,500 | 631,950 | 286,551 | 735,495 | 2,033,801 | 59,865 |
Professional fees | 235,521 | 355,692 | 415,416 | 637,806 | 717,548 | 102,765 |
General and administrative expense | 420,649 | 170,303 | 817,141 | 553,658 | 661,724 | 386,133 |
Total Operating Expenses | 706,904 | 1,238,650 | 1,585,866 | 2,023,358 | 3,626,375 | 549,918 |
Operating Loss | (496,002) | (1,235,688) | (1,352,691) | (2,013,293) | (3,623,892) | (549,918) |
Other Income (Expense) | ||||||
Interest expense | (3,630,290) | (283,448) | (6,336,773) | (836,901) | (1,422,469) | (7,827) |
Gain on Debt Cancellation | 0 | 50,747 | 0 | 50,747 | 45,745 | 168,048 |
Changes in Fair Value of Derivative Liabilities | 1,410,329 | (1,280,180) | 2,719,241 | (1,096,755) | 111,268 | 0 |
Uncollectible Note Receivable | (40,000) | 0 | ||||
Other Income | 0 | 0 | 1,642 | 0 | 0 | 100 |
Equity method loss | 0 | 0 | (211,376) | 0 | ||
Total Other Income (Expense) | (2,219,961) | (1,512,881) | (3,827,266) | (1,882,909) | (1,305,456) | 160,321 |
Net Loss | (2,715,963) | (2,748,569) | (5,179,957) | (3,896,202) | (4,929,348) | (389,597) |
Net loss attributable to noncontrolling interest | (92,318) | 0 | (92,318) | 0 | ||
Net loss attributable to Cannabis Global, Inc. | $ (2,808,281) | $ (2,748,569) | $ (5,272,275) | $ (3,896,202) | $ (4,929,348) | $ (389,597) |
Basic & Diluted Loss per Common Share | $ (0.04) | $ (0.22) | $ (0.11) | $ (0.31) | $ (0.29) | $ (0.03) |
Weighted Average Common Shares Outstanding | 68,325,203 | 12,549,491 | 49,661,819 | 12,549,491 | 17,101,743 | 12,261,293 |
Product Sales [Member] | ||||||
Revenues: | ||||||
Total Revenue | $ 940,491 | $ 19,750 | $ 970,717 | $ 24,753 | $ 27,004 | $ 0 |
Consulting Revenue Related Party Member | ||||||
Revenues: | ||||||
Total Revenue | $ 0 | $ 0 | $ 0 | $ 5,000 |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($) | Class A Preferred Stock | Common Stock | Common Stock To Be Issued | Preferred Stock To Be Issued | Additional Paid-In Capital | Accumulated Deficit | Stockholders Equity Attributable to Cannabis Global Inc. | Noncontrolling Interest | 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) | |||||
Common stock issued for services rendered, Shares | 1,533,333 | ||||||||
Common stock issued for services rendered, Value | $ 153 | 350,812 | 350,965 | ||||||
Proceeds from common stock subscriptions, Shares | 266,667 | ||||||||
Proceeds from common stock subscriptions, Value | $ 27 | 99,973 | 100,000 | ||||||
Proceeds from common stock subscriptions- to be issued, Shares | 360,000 | ||||||||
Proceeds from common stock subscriptions- to be issued, Value | $ 36 | 134,964 | 135,000 | ||||||
Net Loss | (389,597) | (389,597) | |||||||
Ending Balance, Shares at Aug. 31, 2019 | 12,524,307 | 1,893,333 | |||||||
Ending Balance, Value at Aug. 31, 2019 | $ 1,253 | $ 189 | 1,187,574 | (1,127,601) | $ 61,415 | 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 | 20,883 | |||||
Stock based compensation, Value | 95,670 | 95,670 | 95,670 | ||||||
Proceeds from common stock subscriptions, Shares | 203,333 | ||||||||
Proceeds from common stock subscriptions, Value | $ 20 | 74,980 | 75,000 | 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 | 65,000 | |||||
Discount on convertible notes | 20,000 | 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) | (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) | (47,469) | |||
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 | 61,415 | |||
Stock based compensation, Share | 9,188,888 | (1,226,579) | |||||||
Stock based compensation, Value | $ 919 | $ (122) | 2,347,336 | 2,348,133 | |||||
Proceeds from common stock subscriptions, Shares | 5,180,402 | 510,204 | |||||||
Proceeds from common stock subscriptions, Value | $ 517 | $ 51 | 714,044 | 714,612 | |||||
Common stock to be issued for investment, Shares | |||||||||
Common stock to be issued for investment, Value | |||||||||
Common stock issued in settlement of convertible notes payable and accrued interest, Shares | 694,900 | ||||||||
Common stock issued in settlement of convertible notes payable and accrued interest, Value | $ 69 | 242,566 | 242,635 | ||||||
Discount on convertible notes | 126,467 | 126,467 | |||||||
Preferred stock issued, Shares | 6,000,000 | ||||||||
Preferred stock issued, Value | $ 600 | 200 | 800 | ||||||
Effects of Reverse stock-split, shares | 188,822 | ||||||||
Effects of Reverse stock-split, Value | $ 19 | (19) | |||||||
Net Loss | (4,929,348) | (4,929,348) | |||||||
Ending Balance, Shares at Aug. 31, 2020 | 6,000,000 | 27,082,419 | 1,871,858 | ||||||
Ending Balance, Value at Aug. 31, 2020 | $ 600 | $ 2,708 | $ 187 | 4,618,168 | (6,056,949) | (1,435,286) | (1,435,286) | ||
Beginning Balance, Shares at Nov. 30, 2019 | 14,833,128 | 260,000 | |||||||
Beginning Balance, Value at Nov. 30, 2019 | $ 1,483 | $ 26 | 1,464,060 | (1,513,038) | (47,469) | (47,469) | |||
Stock based compensation, Value | 94,618 | 94,618 | 94,618 | ||||||
Common stock to be issued for investment, Shares | 400,000 | ||||||||
Common stock to be issued for investment, Value | $ 40 | 112,360 | 112,400 | 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) | (762,196) | ||||||
Ending Balance, Shares at Feb. 29, 2020 | 15,093,128 | 400,000 | |||||||
Ending Balance, Value at Feb. 29, 2020 | $ 1,509 | $ 40 | 1,671,038 | (2,275,234) | (602,647) | (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 | 737,325 | ||||
Stock based compensation, Share | |||||||||
Stock based compensation, Value | 97,772 | 97,772 | 97,772 | ||||||
Proceeds from common stock subscriptions, Shares | 1,222,941 | ||||||||
Proceeds from common stock subscriptions, Value | $ 122 | 159,878 | 160,000 | 160,000 | |||||
Common stock issued in settlement of convertible notes payable and accrued interest, Shares | 694,900 | ||||||||
Common stock issued in settlement of convertible notes payable and accrued interest, Value | $ 695 | 695 | 695 | ||||||
Discount on convertible notes | 340,066 | 340,066 | 340,066 | ||||||
Preferred stock issued, Shares | 6,000,000 | ||||||||
Preferred stock issued, Value | $ 600 | 200 | 800 | 800 | |||||
Net Loss | (2,748,569) | (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 | $ 1,706 | $ 945 | 3,005,994 | (5,023,803) | (2,014,558) | (2,014,558) | ||
Beginning Balance, Shares at Aug. 31, 2020 | 6,000,000 | 27,082,419 | 1,871,858 | ||||||
Beginning Balance, Value at Aug. 31, 2020 | $ 600 | $ 2,708 | $ 187 | 4,618,168 | (6,056,949) | (1,435,286) | (1,435,286) | ||
Stock based compensation, Share | 3,400,000 | ||||||||
Stock based compensation, Value | $ 3,400 | 179,600 | 183,000 | 183,000 | |||||
Proceeds from common stock subscriptions, Shares | 510,204 | 89,796 | |||||||
Proceeds from common stock subscriptions, Value | $ 510 | $ 90 | (600) | 0 | 0 | ||||
Common stock to be issued for investment, Shares | 7,222,222 | ||||||||
Common stock to be issued for investment, Value | $ 7,222 | 642,778 | 650,000 | 650,000 | |||||
Common stock issued in settlement of convertible notes payable and accrued interest, Shares | 1,500,000 | ||||||||
Common stock issued in settlement of convertible notes payable and accrued interest, Value | $ 1,500 | 28,500 | 30,000 | 30,000 | |||||
Effects of Par value adjustment | 24,372 | 1,683 | (26,055) | ||||||
Discount on convertible notes | |||||||||
Preferred stock issued, Value | |||||||||
Net Loss | (353,224) | (353,224) | (353,224) | ||||||
Ending Balance, Shares at Nov. 30, 2020 | 6,000,000 | 39,714,845 | 1,961,654 | ||||||
Ending Balance, Value at Nov. 30, 2020 | $ 600 | $ 39,712 | $ 1,960 | 5,442,391 | (6,410,173) | (925,510) | (925,510) | ||
Stock based compensation, Share | 4,106,543 | (600,000) | |||||||
Stock based compensation, Value | $ 4,107 | $ (600) | 335,827 | 339,334 | 339,334 | ||||
Proceeds from common stock subscriptions, Shares | 6,516,667 | ||||||||
Proceeds from common stock subscriptions, Value | $ 6,517 | 384,483 | 391,000 | 391,000 | |||||
Common stock to be issued for investment, Shares | 12,820,297 | ||||||||
Common stock to be issued for investment, Value | $ 12,820 | 2,209,355 | 2,222,175 | 3,849,293 | 6,071,468 | ||||
Common stock issued in settlement of convertible notes payable and accrued interest, Shares | 3,047,335 | ||||||||
Common stock issued in settlement of convertible notes payable and accrued interest, Value | $ 3,047 | 213,682 | 216,729 | 216,729 | |||||
Derivative impact of conversions | 276,975 | 276,975 | 276,975 | ||||||
Net Loss | (2,110,770) | (2,110,770) | (2,110,770) | ||||||
Ending Balance, Shares at Feb. 28, 2021 | 6,000,000 | 66,205,687 | 1,361,654 | ||||||
Ending Balance, Value at Feb. 28, 2021 | $ 600 | $ 66,203 | $ 1,360 | 8,862,713 | (8,520,943) | 409,933 | 3,849,293 | 4,259,226 | |
Stock based compensation, Share | 500,000 | ||||||||
Stock based compensation, Value | $ 500 | 70,933 | 71,433 | 71,433 | |||||
Proceeds from common stock subscriptions, Shares | 1,314,188 | ||||||||
Proceeds from common stock subscriptions, Value | $ 1,314 | 0 | 77,537 | 78,851 | 78,851 | ||||
Common stock to be issued for investment, Value | |||||||||
Common stock issued in settlement of convertible notes payable and accrued interest, Shares | 10,713,442 | ||||||||
Common stock issued in settlement of convertible notes payable and accrued interest, Value | $ 10,713 | 657,537 | 668,250 | 668,250 | |||||
Derivative impact of conversions | 1,213,985 | 1,213,985 | 1,213,985 | ||||||
Net Loss | (2,808,281) | (2,808,281) | 92,318 | (2,715,963) | |||||
Ending Balance, Shares at May. 31, 2021 | 6,000,000 | 78,733,317 | 1,361,654 | ||||||
Ending Balance, Value at May. 31, 2021 | $ 600 | $ 78,731 | $ 1,360 | $ 0 | $ 10,882,705 | $ (11,329,224) | $ (365,829) | $ 3,941,611 | $ 3,575,783 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | 12 Months Ended | ||
May 31, 2021 | May 31, 2020 | Aug. 31, 2020 | Aug. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net Loss | $ (5,179,957) | $ (3,896,202) | $ (4,929,348) | $ (389,597) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Non-Cash Interest Expense | 5,784,092 | 841,870 | 1,299,876 | 0 |
Equity method loss from investments | 211,376 | 0 | ||
Uncollectible Note Receivable | 40,000 | 0 | ||
Depreciation Expense | 2,697 | 2,444 | 3,342 | 752 |
Stock Based Compensation | 593,767 | 835,897 | 2,348,133 | 350,965 |
Changes in Fair Value of Derivative Liabilities | (2,719,241) | 1,096,755 | (111,268) | 0 |
Gain on Debt Cancellation | (45,745) | (168,048) | ||
Changes In: | ||||
Accounts Receivable | (165,206) | (5,000) | ||
Accounts Receivable - Related Party | 0 | (5,003) | ||
Rent Deposit | 0 | (7,200) | ||
Inventory | (106,930) | (36,752) | (73,039) | (2,299) |
Other asset | 20,447 | 0 | ||
Accounts Payable | (75,258) | 91,118 | ||
Accounts Payable and accrued expenses | 37,570 | 86,569 | ||
Accounts Payable - Related Party | 9,998 | (1,139) | 0 | (5,061) |
Accrued Professional and Legal Expenses | (5,885) | 5,885 | ||
Accrued R&D Expenses | (6,250) | 6,250 | ||
Accrued Interest | 190,300 | 25,576 | 33,301 | 5,235 |
Accrued Interest - Related Party | 0 | 2,592 | ||
Due to Joint Venture | 135,000 | 0 | ||
Net Cash Used in Operating Activities | (1,186,087) | (1,054,985) | (1,522,141) | (109,408) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Purchase of Machinery & Equipment | (9,511) | (3,500) | (15,499) | (14,000) |
Cash acquired in acquisition | 2,200 | 0 | ||
Net Cash Provided by Investing Activities | (7,311) | (3,500) | (15,499) | (14,000) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from Issuance of Common Stock | 469,851 | 300,000 | 714,612 | 235,000 |
Proceeds from convertible notes payable | 1,891,000 | 691,269 | 673,284 | 33,334 |
Repayment of convertible notes payable | (854,500) | 0 | ||
Repayment of notes payable | (47,284) | 0 | ||
Proceeds from Note Payable - Related Party | 0 | 0 | 0 | 42,504 |
Advances to related party | 0 | 0 | 0 | (40,000) |
Net Cash Provided by Financing Activities | 1,459,067 | 991,269 | 1,387,896 | 270,838 |
Net (Decrease) Increase in Cash | 265,669 | (67,216) | (149,744) | 147,430 |
Cash at Beginning of Period | 2,338 | 152,082 | 152,082 | 4,652 |
Cash at End of Period | 268,007 | 84,866 | 2,338 | 152,082 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||
Interest | 301,135 | 0 | 0 | 0 |
Franchise Taxes | 0 | 0 | 0 | 0 |
Shares to be issued and loan incurred for investment | 1,714,903 | 0 | ||
Shares issued and loan incurred for acquisition of intangible assets | 650,000 | 612,400 | ||
Common stock issued for acquisition of NPE | 2,872,175 | 0 | ||
Increase in noncontrolling interest from acquisition of NPE | 3,849,293 | 0 | ||
Shares issued for conversion of notes payable and accrued interest | 914,979 | 0 | ||
Gain on Debt Cancellation | $ 0 | $ 50,747 | $ 45,745 | $ 168,048 |
Organization and Description of
Organization and Description of Business | 9 Months Ended | 12 Months Ended |
May 31, 2021 | Aug. 31, 2020 | |
Accounting Policies [Abstract] | ||
Organization and Description of Business | Note 1. Organization and Description of Business Cannabis Global, 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 accessible at 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 “CBGL.” Historical Development We incorporated in Nevada in 2005 under the name MultiChannel Technologies Corporation, a wholly owned subsidiary of Octillion Corporation, a development stage technology company focused on the identification, acquisition and development of emerging solar energy and solar related technologies. In April, 2005, we changed our name to MicroChannel Technologies, Inc., and in June, 2008, began trading on the OTC Markets under the trading symbol “MCTC.” Our business focused on research and development of a patented intellectual properties combining physical, chemical and biological cues at the “cellular” level to facilitate peripheral nerve regeneration. On 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. On or about July 12, 2018, we formed two subsidiaries 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 constituent entities, and under the terms of the merger we were merged into MicroChannel Corp., with MicroChannel Corp. surviving 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, and beneficial owner 70.7% of our issued and outstanding common stock, sold 130,000,000 common shares, to Mr. Robert Hymers, Mr. Edward Manolos and Mr. Dan Nguyen, all of whom were previously unaffiliated parties of the Company. Each individual purchased 43,333,333 common shares for $108,333 or an aggregate of $325,000. These series of transactions constituted a change in control. On August 9, 2019, we filed a DBA in California registering the operating name Cannabis Global. On July 1, 2019, the Company entered into a 100% business acquisition with Action Nutraceuticals, Inc., a company owned by our CEO, Arman Tabatabaei in exchange for $1,000 (see “Related Party Transactions”). Subsequent to the closing of the fiscal year ending August 31, 2019, we affected a reverse split of our common shares effective as of September 30, 2019 at the rate of 1:15. On September 11, 2019, we formed a subsidiary Aidan & Co, Inc. (“Aidan”) a California corporation as a wholly owned subsidiary of the Company. Aidan will be engaged in various related business opportunities. At this time Aidan has no operations. On December 4, 2019, our shareholders approved and authorized (i) re-domiciling the Company from Delaware to Nevada; (ii) changing the name of the Company from MCTC Holdings, Inc. to Cannabis Global, Inc.; and, (iii) seeking a corresponding change of name and new trading symbol for the Company with FINRA. On March 30, 2020, we filed Articles of Conversion with the Delaware Secretary of State, electing to convert and re-domicile the Company from a Delaware corporation to a newly formed Nevada corporation named Cannabis Global, Inc. Concurrently, the Registrant filed Articles of Incorporation and Articles of Domestication with the Nevada Secretary of State incorporating the Registrant in Nevada under the name Cannabis Global, Inc. and accepting the re-domicile of Registrant’s Delaware corporation. There was no change to the Registrant’s fiscal year end. As a result of our FINRA corporate action, our name was changed to Cannabis Global, Inc. and our trading symbol changed to “CBGL.” On April 18, 2020, we formed a subsidiary Hemp You Can Feel, Inc., a California corporation (“HYCF”), as a wholly owned subsidiary of the Company. HYCF will be engaged in various related business opportunities. At this time HYCF has no operations. On May 6, 2020, we 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. On July 22, 2020, we signed a management agreement with Whisper Weed, Inc., a California corporation (“Whisper Weed”). Edward Manolos, our director, is a shareholder in Whisper Weed (see “Related Party Transactions”). Whisper Weed conducts licensed delivery of cannabis products in California. The material definitive agreement requires the parties to create a separate entity, CGI Whisper W, Inc. in California as a wholly owned subsidiary of the Company. The business of CGI Whisper W, Inc. will be to provide management services for the lawful delivery of cannabis in the State of California. The Company will manage CGI Whisper W, Inc. operations. In exchange for the Company providing management services to Whisper Weed through the auspices of CGI Whisper W, Inc., the Company will receive as consideration a quarterly fee of 51% of the net profits earned by Whisper Weed. As separate consideration for the transaction, the Company agreed to issue to Whisper Weed $150,000 in the Company’s restricted common stock, valued for purposes of issuance based on the average closing price of the Company’s common stock for the twenty days preceding the entry into the material definitive agreement. Additionally, the Company agreed to amend its articles of incorporation to designate a new class of preferred shares. The preferred class will be designated and issued to Whisper Weed in an amount equal to two times the quarterly payment made to the Company. The preferred shares will be convertible into the Company’s common stock after 6 months, and shall be senior to other debts of the Company. The conversion to common stock will be based on a value of common stock equal to at least two times the actual sales for the previous 90 day period The Company agreed to include in the designation the obligation to make a single dividend payment to Whisper Weed equal to 90% of the initial quarterly net profits payable by Whisper Weed. As of July 12, 2021, the Company has not issued the common or preferred shares, and the business is in the development stage. On August 31, 2020, we entered into a stock purchase agreement with Robert L. Hymers III (“Hymers”). Pursuant to the Stock Purchase Agreement, the Company purchased from Hymers 266,667 shares of common stock of Natural Plant Extract of California Inc., a private California corporation (“NPE”), in exchange for $2,040,000. The purchased shares of common stock represents 18.8% of the outstanding capital stock of NPE on a fully diluted basis. NPE operates a licensed psychoactive cannabis manufacturing and distribution business operation in Lynwood, California. In connection with the stock purchase agreement, we became a party to a Shareholders Agreement, dated June 5, 2020, by and among Alan Tsai, Hymers, Betterworld Ventures, LLC, Marijuana Company of America, Inc. and NPE. The Shareholders Agreement contains customary rights and obligations, including restrictions on the transfer of the Shares. On June 11, 2021, the Company and Hymers amended the stock purchase agreement to exchange the Registrant’s obligations to make monthly payments, for our issuance of a Convertible Note for the same amount, with principal and interest due on June 11, 2022. The Convertible Note also provides Hymers with the right to convert outstanding principal and interest into our common stock at a fixed price of $0.04 per share, unless, at the time the amounts due under this Note are eligible for conversion, the Securities and Exchange Commission has not enacted any amendment to the provisions of Rule 144(d)(iii) or other provision in a manner that would adversely affect the tacking of variable rate securities. In such event the Conversion Price shall equal 60% of the lowest trading price of the Company’s Common Stock for the 10 trading days immediately preceding the delivery of a Notice of Conversion to the Company. The Company also agreed, in the event that it determined to prepare and file a registration statement concerning its common stock, to include all the shares issuable upon conversion of this Note. On September 30, 2020, the Company entered into a securities exchange agreement with Marijuana Company of America, Inc., a Utah corporation (“MCOA”). By virtue of the agreement, the Company issued 7,222,222 shares of its unregistered common stock to MCOA in exchange for 650,000,000 shares of MCOA unregistered common stock. The Company and MCOA also entered into a lock up leak out agreement which prevents either party from sales of the exchanged shares for a period of 12 months. Thereafter the parties may sell not more than the quantity of shares equaling an aggregate maximum sale value of $20,000 per week, or $80,000 per month until all Shares and Exchange Shares are sold. On June 9, 2021, the parties amended their securities exchange agreement to delete the lock up leak out agreement, and the requirement to conduct quarterly reviews of each party’s respective stock price for purposes of evaluating whether additional share issuances are required to maintain the value of exchanged common shares equal to $650,000. As consideration for the amendment, we issued MCOA 618,000 shares of restricted common stock. We issued the common stock pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, available to the Company by Section 4(a)(2) promulgated thereunder due to the fact that it was an isolated issuance and did not involve a public offering of securities. On November 16, 2020, we entered into a business acquisition agreement with Ethos Technology LLC, dba Comply Bag, a California limited liability company (“Ethos”). Ethos is a development stage business in the process of entering the market for cannabis trackable storage bags. By virtue of the agreement, Ethos sold, assigned, and transferred to the Company all of Ethos’ business, including all of its assets and associated liabilities, in exchange for the Company’s issuance of an aggregate of 6,000,000 common shares. 3,000,000 shares were due at signing, with 1,500,000 shares being issued to Edward Manolos, and 1,500,000 shares being issued to Thang Nguyen. Mr. Manolos is our director and a related party. Mr. Nguyen is the brother of Dan Van Nguyen, our director and a related party. After Ethos ships orders for Ethos products equaling $1,000,000 to unaffiliated parties, the Company will issue to Messrs. Manolos and Nguyen an additional 1,500,000 shares of common stock each. At the closing we sold an aggregate 3,000,000 shares of Company common stock, par value $0.001, equal in value to $177,000 based on the closing price on November 16, 2020. Of the total sold, 1,500,000 shares of common stock were sold to Edward Manolos and 1,500,000 shares of common stock were sold to Thang Nguyen. We issued the above shares of its common stock pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, available to the Company by Section 4(a)(2) promulgated thereunder due to the fact that it was an isolated issuance and did not involve a public offering of securities. On January 27, 2021, we closed a material definitive agreement (MDA) with Edward Manolos, our director and related party. Pursuant to the MDA, the Company purchased from Mr. Manolos 266,667 shares of common stock in Natural Plant Extract of California Inc., a California corporation (“NPE”), representing 18.8% of the outstanding capital stock of NPE on a fully diluted basis. NPE operates a licensed psychoactive cannabis manufacturing and distribution business operation in Lynwood, California. NPE is a privately held corporation. Under the terms of the MDA, we acquired all beneficial ownership over the NPE shares in exchange for a purchase price of two million forty thousand dollars ($2,040,000).. In lieu of a cash payment, we agreed to issue Mr. Manolos 11,383,929 restricted common shares, valued for purposes of the MDA at $0.1792 per share. In connection with the MDA, we became a party to a Shareholders Agreement by and among Alan Tsai, Hymers, Betterworld Ventures, LLC, Marijuana Company of America, Inc. and NPE. The Shareholders Agreement contains customary rights and obligations, including restrictions on the transfer of the Shares. Mr. Manolos is our director as well as a directly of Marijuana Company of America and is therefore a related party. On February 16, 2021, we purchased 266,667 shares of common stock of Natural Plant Extract of California Inc., a California corporation (“NPE”), from Alan Tsai, in exchange for the issuance of 1,436,368 common shares. Other than with respect to the transaction, there was no material relationship between Mr. Tsai and the Registrant. By virtue of the transaction, the Registrant acquired 18.8% of the outstanding capital stock of NPE, bringing its total beneficial ownership in NPE to 56.5%. NPE operates a licensed psychoactive cannabis manufacturing and distribution business operation in Lynwood, California. By virtue of its 56.5% ownership over NPE, the Company will control production, manufacturing and distribution of both NPE and Company products. In connection with the MDA, the Registrant became a party to a Shareholders Agreement by and among Edward Manolos, a director of the Company, Robert L. Hymers III, Betterworld Ventures, LLC, Marijuana Company of America, Inc. and NPE. The Shareholders Agreement contains customary rights and obligations concerning operations, management, including restrictions on the transfer of the Shares. On May 12, 2021, The Company and Marijuana Company of America (MCOA) agreed to operate a joint venture through a new Nevada corporation named MCOA Lynwood Services, Inc. The parties agreed to finance a regulated and licensed laboratory to produce various cannabis products under the legal framework outlined by the City of Lynwood, California, Los Angeles County and the State of California. We own a controlling interest in Natural Plant Extract of California, Inc., which operates a licensed cannabis manufacturing operation in Lynwood, California. As its contribution the joint venture, MCOA agreed to purchase and install equipment for joint venture operations, which will then be rented to the joint venture, and also provide funding relating to marketing the products produced by the capital equipment. We agreed to provide use of our manufacturing and distribution licenses; access to the Lynwood, California facility; use of the specific areas within the Lynwood Facility suitable for the types of manufacturing selected by the joint venture; and, management expertise require to carry on the joint venture’s operations. Our ownership of the joint venture was agreed to be 60% in us and 40% with MCOA. Royalties from profits realized as the result of sales of products from the joint venture were also agreed to be distributed as 60% to us and 40% to MCOA. MCOA contributed $135,000 of cash to the joint venture for its operations. Current Business Operations Cannabis Global manufactures and distributes various cannabis products via its majority ownership of Natural Plant Extract, Inc. and conducts research and development in the areas of hemp, cannabis and consumer food goods. We recently announced our acquisition of a 56.5%, controlling interest in Natural Plant Extract (NPE), which operates a licensed cannabis manufacturing and distribution business in Lynwood, California, holding a Type 7 California Manufacturing and a distribution license, allowing for cannabis product distribution anywhere in the state. We plan to use the Lynwood NPE operation, combined with our internally developed technologies, as a testbed to launch multi-state operations as soon as possible after the expected removal of cannabis as a Scheduled substance from the federal CSA is completed, and interstate commerce in cannabis is approved by the federal government. As of the date of this filing, cannabis remains a Schedule 1 controlled substance and so illegal under the CSA. However, As a result of the November, 2020 federal elections, and the election of Joseph R. Biden as president, it is expected that the federal government will move to amend parts of the CSA and de-schedule cannabis as a Schedule 1 drug. In late January, 2021, Senate Majority Leader Chuck Schumer said lawmakers are in the process of merging various cannabis bills, including his own legalization legislation. He is working to enact reform in this Congressional session. This would include the Marijuana Freedom and Opportunity Act, that would federally de-schedule cannabis, reinvest tax revenue into communities most affected by the drug war, and fund efforts to expunge prior cannabis records. It is likely that the Marijuana Opportunity, Reinvestment, and Expungement (MORE) Act would be incorporated. Other federal legislation under review for possible submission includes the SAFE Banking Act (or Secure and Fair Enforcement Act), a bill that would allow cannabis companies to access the federally-insured banking system and capital markets without the risk of federal enforcement action, and the Strengthening the Tenth Amendment Through Entrusting States Act (or STATES Act), a bill that seeks protections for businesses and individuals in states that have legalized and comply with state laws). Our operations at the Natural Plant Extract facility emphasizes cannabis product manufacturing and distribution. In addition to business opportunities available from cannabis product manufacturing and distribution to all parts of the State of California, we also sees strong synergies between NPE operations and our developing technologies in the areas of secure cannabis transport, cannabis infusions, and all-natural polymeric nanoparticle technologies. We also have an active research and development program primarily focused on creating and commercializing engineered technologies that deliver hemp extracts and cannabinoids to the human body. Additionally, we invest, or provide managerial services, in specialized areas of the regulated hemp and cannabis industries. Thus far, the Company has filed six provisional patents, three non-provisional patents and recently announced its "Comply Bag" secure cannabis transport system with integrated track and trace capabilities via smartphones, which will be available soon. On April 9, 2021, we entered into a distribution agreement with Lynwood Roads Delivery, LLC (”LDR”). LRD owns a regulatory permit issued by the City of Lynwood permitting commercial retailer non-storefront operation in Lynwood, California. Under the terms of the agreement, the Company’s majority owned subsidiary, Natural Plant Extract of California, via is licensed Northern Lights Distribution, Inc. operation will distribute selected products for LDR. On April 21, 2021, The Company began taking orders for its new product lines produced at the NPE facility, completing its initial product development phase. On May 12, 2021, we entered into an agreement to operate a joint venture through a new Nevada corporation named MCOA Lynwood Services, Inc. The parties agreed to finance a regulated and licensed laboratory to produce various cannabis products under the legal framework outlined by the City of Lynwood, California, Los Angeles County and the State of California. The Registrant owns a controlling interest in Natural Plant Extract of California, Inc., which operates a licensed cannabis manufacturing operation in Lynwood, California. As its contribution the joint venture, MCOA agreed to purchase and install equipment for joint venture operations, which will then be rented to the joint venture, and also provide funding relating to marketing the products produced by the capital equipment. We agreed to provide use of NPE’s manufacturing and distribution licenses; access to its Lynwood, California facility; use of the specific areas within the Lynwood Facility suitable for the types of manufacturing selected by the joint venture; and, management expertise require to carry on the joint venture’s operations. Ownership of the joint venture was agreed to be 60% in us and 40% with MCOA. Royalties from profits realized as the result of sales of products from the joint venture was also agreed to be distributed as 60% to us and 40% to MCOA. Development of the joint venture is ongoing and is considered in the development stage. Our research and development programs included the following: 1. Development of new routes and vehicles for hemp extract and cannabinoid delivery to the human body. 2. Production of unique polymeric nanoparticles and fibers for use in oral and dermal cannabinoid delivery. 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 and other proven bioenhancers, including naturally occurring and insect produced glycosides. 5. Development of other novel inventions for the delivery of cannabinoids to the human body, which at this time are considered our trade secrets. | NOTE 1 — Organization and Description of Business Cannabis Global, 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 accessible at www.cannabisglobalinc.com Our shares of Common Stock are quoted on the OTC Markets Pink, operated by OTC Markets Group, Inc., under the ticker symbol “CGBL.” Our aim is to grow our revenues in the marketplace for hemp, hemp extracts, and cannabis. While we are indirectly involved in the cannabis business, we do not directly engage in the cultivation, manufacturing, distribution or sales of regulated cannabis products. By way of our investment in Natural Plant Extract of California Inc., a California corporation (“NPE”) and our management agreement with Whisper Weed, Inc., a California corporation (“Whisper Weed”), we are indirectly involved in the business of the cultivation, manufacturing, distribution or sales of regulated cannabis products. Edward Manolos, a director of the Company, is a shareholder in Whisper Weed, thus the management agreement is Related Party Transaction and is described in the sections marked “Related Party Transactions”. Our business focus is twofold: 1) Development and commercialization of proprietary engineered technologies to deliver hemp extracts and cannabinoids to the human body. We are achieving this goal by way of an active research and development programs and of the introduction to the industry of new hemp and hemp extract infusion technologies; and, 2) Investments into specialized area of the regulated and licenses cannabis business where are hold either an equity state or provide managerial services. 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 identification, acquisition and development of emerging solar energy and solar related technologies and products. On January 14, 2009, Octillion Corp. (Symbol: OCTL), 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. 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. surviving 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 July 1, 2019, the Company acquired Action Nutraceuticals, Inc., a company owned by our current CEO, Arman Tabatabaei (see “Related Party Transactions”). The transaction value was nominal, at only One Thousand Dollars ($1,000). On April 18, 2020, we formed a subsidiary Hemp You Can Feel, Inc. a California corporation (“HYCF”) as a wholly owned subsidiary of the Company. HYCF will be engaged in various related business opportunities. At this time HYCF has no operations. 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 (see “Related Party Transactions”). The transaction value was nominal, at only One Thousand Dollars ($1,000). On August 9, 2019, our board of directors determined the Company no longer meets 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, 6) production of product samples, 7) 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 September 11, 2019, we formed a subsidiary Aidan & Co, Inc. (“Aidan”) a Nevada corporation as a wholly owned subsidiary of the Company. Aidan will be engaged in various related business opportunities. At this time Aidan has minimal operations. On February 20, 2020, the Company entered into a material definitive agreement with Lelantos Biotech, Inc., a Wyoming corporation (“Lelantos”), and its owners 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”). In exchange for intellectual properties owned by Lelantos, the Company agreed to issue 400,000 shares of common stock and convertible promissory notes to Lelantos and its owners. On June 15, 2020, the Company and Lelantos entered into a modification agreement cancelling the Company's obligation to issue 400,000 shares of common stock and the convertible promissory notes. The Company and Lelantos agreed to a purchase price of five hundred thousand dollars ($500,000), payable by the issuance of a promissory note. The aggregate unpaid principal amount of the note is paid in monthly payments of seven thousand, five hundred dollars ($7,500) beginning on September 1, 2020, terminating on February 1, 2025. There is no interest on the note or on the unpaid balance. 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. On July 22, 2020, we signed a management agreement with Whisper Weed, Inc., a California corporation (“Whisper Weed”). Edward Manolos, a director of the Company, is a shareholder in Whisper Weed (see “Related Party Transactions”). Whisper Weed conducts licensed and compliant delivery activity of cannabis products in California. The material definitive agreement requires the parties to create a separate entity, CGI Whisper W, Inc. in California as a wholly owned subsidiary of the Company. The business of CGI Whisper W, Inc. will be to provide management services for the lawful delivery of cannabis in the State of California. The Company will manage CGI Whisper W, Inc. operations. In exchange for the Company providing management services to Whisper Weed through the auspices of CGI Whisper W, Inc., the Company will receive as consideration a quarterly fee of 51% of the net profits earned by Whisper Weed. As separate consideration for the transaction, the Company agreed to issue to Whisper Weed $150,000 in the Company’s restricted common stock, valued for purposes of issuance based on the average closing price of the Company’s common stock for the twenty days preceding the entry into the material definitive agreement. The Company recognized stock-based compensation of $116,282 related to the 666,754 shares to be issued to Whisper Weed. Additionally, the Company agreed to amend its articles of incorporation to designate a new class of preferred shares. The preferred class shall be designated and issued to Whisper Weed in an amount equal to two times the quarterly payment made to the Company. The preferred shares shall be convertible into the Company’s common stock after 6 months, and shall be senior to other debts of the Company. The conversion to common stock will be based on a value of common stock equal to at least two times the actual sales for the previous 90 day period The Company agreed to include in the designation the obligation to make a single dividend payment to Whisper Weed equal to 90% of the initial quarterly net profits payable by Whisper Weed. No preferred share designation or issuance occurred as of August 31, 2020. On August 31, 2020, we entered into a stock purchase agreement with Robert L. Hymers III (“Hymers”), an individual. With the exception of the entry into the subject material definitive agreements, no material relationship exists between the Company, or any of the Company’s affiliates or control persons and Hymers. Pursuant to the Stock Purchase Agreement (the “SPA”) the Company purchased 266,667 shares of common stock of Natural Plant Extract of California Inc., a California corporation (“NPE”), representing 18.8% of the outstanding capital stock of NPE on a fully diluted basis. NPE operates a licensed psychoactive cannabis manufacturing and distribution business operation in Lynwood, California. NPE is a private corporation and is not publicly traded. Under the terms of the SPA, the Company acquired all rights and responsibilities of the equity stake for a purchase price of Two Million Forty Thousand United States Dollars ($2,040,000) (the “Purchase Price”). In connection with the SPA, the Company became a party to a Shareholders Agreement, dated June 5, 2020, by and among Alan Tsai, Hymers, Betterworld Ventures, LLC, Marijuana Company of America, Inc. and NPE. The Shareholders Agreement contains customary rights and obligations, including restrictions on the transfer of the Shares. |
Going Concern Uncertainties and
Going Concern Uncertainties and Liquidity Requirements | 9 Months Ended | 12 Months Ended |
May 31, 2021 | Aug. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Going Concern Uncertainties and Liquidity Requirements | Note 2. Going Concern Uncertainties The Company has an accumulated deficit of $11,329,224 as of May 31, 2021. Furthermore, as shown in the accompanying financial statements for nine months ended May 31, 2021, the Company had a net loss of $5,179,957 and used cash in operations of $1,186,087. The Company expects to incur additional losses as it executes its business strategy in the cannabis, hemp and cannabinoid marketplaces. 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 $2,500,000 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. | NOTE 2 – Going Concern Uncertainties and Liquidity Requirements During financial reporting period ending August 31, 2020, the Company generated $27,004 in revenues, has an accumulated deficit of $6,056,949, and does not have positive cash flows from operating activities. The Company expects to incur additional losses as begins to execute its business strategy in the cannabinoid marketplace. 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 | 12 Months Ended |
May 31, 2021 | Aug. 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). We evaluate all of our 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, we use 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. and Natural Plant Extract of California, 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, 2021, and August 31, 2020, 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, 2021. 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, 2021, and May 31, 2020, 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. Beneficial Conversion Feature 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 services or 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 consulting and product sales contracts. We examine and evaluate when our customers become liable to pay for goods and services; how much consideration is paid as compared to the cash selling price of the goods or services; 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. 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. Stock-based compensation during the quarterly reporting period ended May 31, 2021 was $0. 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, 2021 and February 28, 2021, 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. | 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. Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Variable Interest Entities The Company accounts for arrangements that are not controlled through voting or similar rights as variable interest entities (“VIEs”). An enterprise is required to consolidate a VIE if it is the primary beneficiary of the VIE. A VIE is created when (i) the equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties, or (ii) the entity’s equity holders as a group either: (a) lack the power, through voting or similar rights, to direct the activities of the entity that most significantly impact the entity’s economic performance, (b) are not obligated to absorb expected losses of the entity if they occur, or (c) do not have the right to receive expected residual returns of the entity if they occur. If an entity is deemed to be a VIE, the enterprise that is deemed to have a variable interest, or combination of variable interests, that provides the enterprise with a controlling financial interest in the VIE, is considered the primary beneficiary and must consolidate the VIE. Investments where the Company has significant influence, but not control, and joint ventures which are VIEs in which the Company is not the primary beneficiary, are recorded under the equity method of accounting on the accompanying consolidated financial statements. As of August 31, 2020, the Company held a variable interest in an entity for which it directly held an 18.8% equity interest, and indirectly controlled 37.6% of the equity. The entity was not determined to be a VIE under ASC 810, as it did not meet the criteria outlined above. Since the Company indirectly controls less than 50% of the voting interest of the entity, the entity is not consolidated, and the Company accounts for the investment under the equity method of accounting in accordance with ASC 321. Since the entity in which the Company holds its investment does not have a readily determinable fair value, the Company elected to account for the investment under the measurement alternative, accounting for the investment at cost less impairment, plus or minus any changes resulting from observable price changes in orderly transactions for the same investment. See Note 8 for additional information on this investment. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The extent to which the COVID-19 pandemic impacts the Company’s business and financial results will depend on numerous evolving factors including, but not limited to: the magnitude and duration of the COVID-19 pandemic, the extent to which it will impact worldwide macroeconomic conditions, the speed of the anticipated recovery, and governmental and business reactions to the pandemic. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of August 30, 2020 and through the date of this report. The matters assessed included accounts receivable and the carrying value of investments, intangible assets and other long-lived assets. The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in additional material impacts to the Company’s consolidated financial statements in future reporting periods. 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 net realizable value for the inventory is lower than cost, in which case an allowance is established to reduce the valuation to the net realizable value. As of August 31, 2020, and August 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 August 31, 2020 or August 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 August 31, 2020, and August 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 is reviewed for impairment as discussed below under “Accounting for the Impairment of Long-Lived Assets.” We did not capitalize any interest as of August 31, 2020, and as of August 31, 2019. 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 year ended August 31, 2020, and August 31, 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 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 services or products contain significant financing components that require revenue adjustment under FASB ASC Topic 606. In accordance with FASB ASC Topic 606, Revenue Recognition, we recognize revenue when persuasive evidence of a significant financing component exists in our consulting and product sales contracts. We examine and evaluate when our customers become liable to pay for goods and services; how much consideration is paid as compared to the cash selling price of the goods or services; and, the length of time between our performance and the receipt of payment. Product Sales Revenue from product sales, including delivery fees, is recognized at a point in time when control of the promised goods is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods. 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 costs of revenue in the same manner in conjunction with revenue recognition. Cost of revenues include the costs directly attributable to revenue recognition and includes 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 year ended August 31, 2020 and August 31, 2019 we incurred no income taxes. As of August 31, 2020, and August 31, 2019, we had no liabilities related to federal or state income taxes. Other Tax Related Policies Incentive Stock Options. Nonstatutory Stock Options. Restricted Stock. Stock Units. Stock Appreciation Rights. Income Tax Effects for the Company. Internal Revenue Code Section 162(m) Deduction Limitation. Internal Revenue Code Section 280G. Certain types of nonqualified deferred compensation arrangements. A violation of Section 409A of the Code generally results in an acceleration of the recognition of income of amounts intended to be deferred and the imposition of a federal excise tax of 20% on the employee over and above the income tax owed, plus possible penalties and interest. The types of arrangements covered by Section 409A of the Code are broad and may apply to certain awards available under the 2020 Plan (such as stock units). The intent is for the 2020 Plan, including any awards available thereunder, to comply with the requirements of Section 409A of the Code to the extent applicable. As required by Code Section 409A, certain nonqualified deferred compensation payments to specified employees may be delayed to the seventh month after such employee’s separation from service. 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 | 12 Months Ended |
May 31, 2021 | Aug. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net Loss Per Share | Note 4. Net Loss Per Share | Note 4 - Net Loss Per Share During fiscal years ending August 31, 2020 and August 31, 2019, the Company recorded a net loss. Basic and diluted net loss per share is the same for those periods. |
Notes Receivable - Related Part
Notes Receivable - Related Party | 9 Months Ended | 12 Months Ended |
May 31, 2021 | Aug. 31, 2020 | |
Notes to Financial Statements | ||
Notes Receivable - Related Party | Note 5. – Notes Receivable – Related Party 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. Because of Mr. Manolos’ and Mr. Nguyen’s associations as directors, 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 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. | Note 5 – Notes Receivable 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. 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. As of the end of the fiscal year August 31, 2020, the Company determined it is not likely that repayment of the $40,000 note would occur, thus the Company booked an allowance for Bad Debt expense for the amount, bringing the note balance to zero, as of the end of the fiscal year ending August 31, 2020. |
Intangible Assets
Intangible Assets | 9 Months Ended |
May 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 6. Intangible Assets On February 20, 2020, the Company entered into a material definitive agreement with Lelantos Biotech, Inc., a Wyoming corporation (“Lelantos”), and its owners. On June 15, 2020, the Company and Lelantos entered into a modification agreement cancelling the Company's obligation to issue 400,000 shares of common stock and the convertible promissory notes. The Company and Lelantos agreed to a purchase price of five hundred thousand dollars ($500,000), payable by the issuance of a promissory note. The aggregate unpaid principal amount of the note is paid in monthly payments of seven thousand, five hundred dollars ($7,500) beginning on September 1, 2020, terminating on February 1, 2025. There is no interest on the note or on the unpaid balance. |
Acquisition of Natural Plant Ex
Acquisition of Natural Plant Extract of California, Inc. | 9 Months Ended |
May 31, 2021 | |
Notes to Financial Statements | |
Acquisition of Natural Plant Extract of California, Inc. | Note 7. Acquisition of Natural Plant Extract of California, Inc. On August 31, 2020 we issued a convertible promissory note pursuant to a Stock Purchase Agreement (the “SPA) with Robert L. Hymers, III (“Hymers”) to acquire 266,667 shares of common stock of Natural Plant Extract of California Inc., a California corporation (“NPE”), representing 18.8% of the outstanding capital stock of NPE on a fully diluted basis. With the exception of the entry into the subject material definitive agreements, no material relationship exists between us, or any of our affiliates or control persons and Hymers. Under the terms of the SPA, we acquired all rights and responsibilities of the equity stake for a purchase price of Two Million Forty Thousand United States Dollars ($2,040,000) (the “Purchase Price”). Relative to the payment of the Purchase Price, we agreed to: 1) pay Hymers twenty thousand dollars ($20,000) each month for a period of twenty-seven (27) months, with the first payment commencing September 1, 2020 and the remaining payments due and payable on the first day of each subsequent month until Hymers has received Five Hundred Forty Thousand United Stated Dollars ($540,000), and 2) issue Hymers a convertible promissory note in the amount of One Million Five Hundred Thousand United States Dollars ($1,500,000) (the “Note”). The Note bears interest at ten percent (10%) per annum. Hymers has the right at any time six (6) months after the issuance date to convert all or any part of the outstanding and unpaid principal, interest, fees, or any other obligation owed pursuant to the note. Conversion Price shall be calculated as follows: 60% of the lowest Trading Price of the common shares during the ten (10) days preceding the date the Company receive a notice of conversion. Unless permitted by the applicable rules and regulations of the principal securities market on which the common stock is then listed or traded, in no event shall we issue upon conversion of or otherwise pursuant to the note and the other notes issued, more than the maximum number of shares of common stock that we can issue pursuant to any rule of the principal United States securities market on which the common stock is then traded, which shall be 4.99% of the total shares outstanding at any time. A debt discount of $54,212 on the note payable at issuance was calculated based on the present value of the note using an implied interest rate of 10%. A debt discount of $270,886 was recognized. Accordingly, we recorded an initial value of its investment in NPE of $1,714,903. On June 11, 2021, we amended the material definitive agreement with Hymers. The amendment relieved us from having to make monthly payments of $20,000 to Hymers in exchange for our issuing a convertible promissory note to Hymers for the balance owed of $440,000. On January 27, 2021, the Company acquired an additional 18.8% interest in NPE from Edward Manolos, a Director of the Company and a related party. The Company issued 11,383,929 shares of common stock, which had a fair value of $1,821,429. On February 16, 2021, we purchased 266,667 shares of common stock of NPE from Alan Tsai, in exchange for the issuance of 1,436,368 common shares of the Company, with a fair value of $400,747. Other than with respect to the transaction, there was no material relationship between Mr. Tsai and us. By virtue of the transaction, we acquired 18.8% of the outstanding capital stock of NPE, bringing our total beneficial ownership in NPE to 56.5%. The transfer of control constituted an acquisition of NPE by the Company (the “NPE Acquisition”). For the three month period following the one year anniversary of the closing date, Mr. Tsai has the sole and irrevocable option to require the Company to repurchase the common shares issued to Mr. Tsai. If the value of the shares at the time notice is given is less than $150,000, Mr. Tsai will receive $150,000. If the value of the shares at the time notices is given is greater than $150,000, then Mr. Tsai will receive the market value of the shares. As a result of the transaction, we became party to a Shareholder Agreement with respect to our ownership over the NPE Shares, dated June 5, 2020, by and among Alan Tsai, Robert Hymers III, Betterworld Ventures, LLC (“BWV”), Marijuana Company of America, Inc. and NPE. The Joinder Agreement contains terms and conditions including, but not limited to: the ownership and management of NPE, rights of shareholders concerning the transfer of shares in NPE, pre-emptive rights, drag-along rights, confidentiality, and term and termination. The NPE acquisition is being accounted for as a business combination under ASC 805 as a result of the transfer of control. Immediately prior to obtaining control, our total investment in NPE was adjusted to fair value of $3,684,347, resulting in a loss on investment of $359,391. The following information summarizes the provisional purchase consideration and preliminary allocation of the fair values assigned to the assets at the purchase date: Preliminary Purchase Price Allocation: Cash 2,200 Accounts receivable 193,607 Notes receivable 162,247 Property and equipment 1,338,569 Right of use asset – operating lease 607,306 Goodwill 8,098,603 Total assets acquired $ 10,402,532 Accounts payable and accrued expenses 289,591 Right of use liability – operating lease 607,306 Notes payable 1,825,101 Notes payable – related party 105,539 Total Liabilities Assumed $ 2,827,537 As a result of the NPE acquisition, we recognized a non-controlling interest as of the date of the acquisition of $3,849,293. Our consolidated revenues and net loss for the nine months ended May 31, 2021 included the results of operations since the acquisition date of NPE of $951,989 and net loss of $211,738, respectively. Our consolidated revenues and net loss for the three months ended May 31, 2021 included the results of operations since the acquisition date of NPE of $933,125 and net loss of $193,941, respectively Unaudited Pro Forma Financial Information The following table sets forth the pro-forma consolidated results of operations for the three and nine months ended May 31, 2021 and 2020 as if the NPE acquisition occurred on September 1, 2019. The pro forma results of operations are presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the acquisitions had taken place on the dates noted above, or of results that may occur in the future. For the three months ended For the nine months ended May 31, 2021 Pro Forma May 31, 2020 Pro Forma May 31, 2021 Pro Forma May 31, 2020 Pro forma Revenue $ 1,041,495 $ 515,808 $ 1,920,357 $ 888,297 Operating loss (1,777,302 ) (1,303,011 ) (2,122,931 ) (2,266,320 ) Net loss attributable to common shareholders of Cannabis Global (3,997,263 ) (2,807,892 ) (6,781,353 ) (4,319,901 ) Net loss per common share $ (0.06 ) $ (0.11 ) $ (0.12 ) $ (0.17 ) |
Note Payable to Shareholders
Note Payable to Shareholders | 9 Months Ended |
May 31, 2021 | |
Notes to Financial Statements | |
Note Payable to Shareholders | Note 8. Note Payable to Shareholders On May 25, 2019, we 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 Payable, Related Party and in the footnote outlining Related Party Transactions. Because of Mr. Manolos’ and Mr. Nguyen’s associations as directors, we consider these transactions transactions with related persons, promoters and certain control persons. |
Related Party Transactions
Related Party Transactions | 9 Months Ended | 12 Months Ended |
May 31, 2021 | Aug. 31, 2020 | |
Related Party Transactions | ||
Related Party Transactions | Note 9. Related Party Transactions In October 2017 – August 31, 2018, we 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, we 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, we 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, we 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 6 - Notes Payable. 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 considers these transactions as transactions with related persons, promoters and certain control persons. During the three months ended February 29, 2020, we 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 our 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. Mr. Hymers 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 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. Hymers converted the principal amount of $79,333 and interest of $2,608, for a total amount of $81,941.55 into 694,902 common shares. As of August 31, 2020, the carrying value of the remaining note with the former chief financial officer was $15,884, net of debt discount of $37,884 and accrued interest was $3,138. On April 30, 2020, the Company entered into a settlement agreement with Robert L. Hymers III, its then Chief Financial Officer (the “CFO”), whereby Mr. Hymers resigned and we 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. Mr. Hymers 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 August 31, 2020, the carrying value of the note was $15,061, net of debt discount of $14,939 and accrued interest was $1,011. On August 31, 2020, the Company issued a convertible note payable and a note payable to Robert L. Hymers III in connection with the acquisition of an 18.8% equity interest in NPE. On November 16, 2020, we entered into a business acquisition agreement with Ethos Technology LLC, dba Comply Bag, a California limited liability company (“Ethos”). Ethos is a development stage business in the process of entering the market for cannabis trackable storage bags. By virtue of the agreement, Ethos sold, assigned, and transferred to the Company all of Ethos’ business, including all of its assets and associated liabilities, in exchange for the Company’s issuance of an aggregate of 6,000,000 common shares. 3,000,000 shares were due at signing, with 1,500,000 shares being issued to Edward Manolos, and 1,500,000 shares being issued to Thang Nguyen. Mr. Manolos is a director of the Company and a related party. Mr. Nguyen is the brother of Dan Van Nguyen, a director of the Company and a related party. After Ethos ships orders for Ethos products equaling $1,000,000 to unaffiliated parties, the Company will issue to Messrs. Manolos and Nguyen an additional 1,500,000 shares of common stock each. On November 16, 2020, the Company sold an aggregate 3,000,000 shares of Company common stock, par value $0.001, equal in value to $177,000 based on the closing price on November 16, 2020. Of the total sold, 1,500,000 shares of common stock were sold to Edward Manolos and 1,500,000 shares of common stock were sold to Thang Nguyen. The sales were made in regards to the Company’s acquisition of Ethos, and its disclosures under Item 1.01 are incorporated herein by reference. The Company issued the above shares of its common stock pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, available to the Company by Section 4(a)(2) promulgated thereunder due to the fact that it was an isolated issuance and did not involve a public offering of securities. Messrs. Manolos and Nguyen were “accredited investors” and/or “sophisticated investors” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning their qualifications as “sophisticated investors” and/or “accredited investors.” The Company provided and made available to Messrs. Manolos and Nguyen full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Messrs. Manolos and Nguyen acquired the restricted common stock for their own accounts, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless subject to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company. On January 27, 2021 Cannabis Global, Inc. (the “Registrant”) closed a material definitive agreement (MDA) with Edward Manolos, a director and related party. Pursuant to the MDA, the Registrant purchased from Mr. Manolos 266,667 shares of common stock in Natural Plant Extract of California Inc., a California corporation (“NPE”), representing 18.8% of the outstanding capital stock of NPE on a fully diluted basis. NPE operates a licensed psychoactive cannabis manufacturing and distribution business operation in Lynwood, California. NPE is a privately held corporation. Under the terms of the MDA, the Registrant acquired all beneficial ownership over the NPE shares in exchange for a purchase price of two million forty thousand dollars ($2,040,000). In lieu of a cash payment, the Registrant agreed to issue Mr. Manolos 11,383,929 restricted common shares, valued for purposes of the MDA at $0.1792 per share. In connection with the MDA, the Registrant became a party to a Shareholders Agreement by and among Alan Tsai, Hymers, Betterworld Ventures, LLC, Marijuana Company of America, Inc. and NPE. The Shareholders Agreement contains customary rights and obligations, including restrictions on the transfer of the Shares. Additionally, the Registrant intends, upon completion of the terms and conditions of the Material Definitive Agreement, to control the production, manufacturing and distribution of both NPE and the Registrant’s products. On May 12, 2021, we entered into an agreement to operate a joint venture through a new Nevada corporation named MCOA Lynwood Services, Inc. Mr. Edward Manolos is a director of both parties to the agreement and this the agreement was an agreement between related parties. The parties agreed to finance a regulated and licensed laboratory to produce various cannabis products under the legal framework outlined by the City of Lynwood, California, Los Angeles County and the State of California. We own a controlling interest in Natural Plant Extract of California, Inc., which operates a licensed cannabis manufacturing operation in Lynwood, California. As its contribution the joint venture, MCOA agreed to purchase and install equipment for joint venture operations, which will then be rented to the joint venture, and also provide funding relating to marketing the products produced by the capital equipment. We agreed to provide use of its manufacturing and distribution licenses; access to its Lynwood, California facility; use of the specific areas within the Lynwood Facility suitable for the types of manufacturing selected by the joint venture; and, management expertise require to carry on the joint venture’s operations. Ownership of the joint venture was agreed to be 60% in us and 40% with MCOA. Royalties from profits realized as the result of sales of products from the joint venture was also agreed to be distributed as 60% in us and 40% to MCOA. Development of the joint venture is ongoing and is considered in the development stage. On May 12, 2021, we entered into a material definitive agreement not made in the ordinary course of its business. The parties to the material definitive agreement are the Registrant and Marijuana Company of America, Inc., a Utah corporation (“MCOA”). Mr. Edward Manolos is a director of both the Company and MCOA, and thus agreement is between related parties. Previously, on September 30, 2020, the Registrant and MCOA entered into a Share Exchange Agreement whereby the Registrant acquired that number of shares of MCOA’s common stock, par value $0.001, equal in value to $650,000 based on the closing price for the trading day immediately preceding the effective date, in exchange for the number of shares of the Registrant’s common stock, par value $0.001, equal in value to $650,000 based on the closing price for the trading day immediately preceding the effective date. For both parties, the Share Exchange Agreement contained a “true-up” provision requiring the issuance of additional common stock in the event that a decline in the market value of the parties’ common stock should cause the aggregate value of the stock acquired pursuant to the Share Exchange Agreement to fall below $650,000. Complementary to the Share Exchange Agreement, Registrant and MCOA entered into a Lock-Up Agreement dated September 30, 2020 (the “Lock-Up Agreement”), providing that the shares of common stock acquired pursuant to the Share Exchange Agreement shall be subject to a lock-up period preventing its sale for a period of 12 months following issuance, and limiting the subsequent sale to aggregate maximum sale value of $20,000 per week, or $80,000 per month. On June 9, 2021, the parties amended their securities exchange agreement to delete the lock up leak out agreement, and the requirement to conduct quarterly reviews of each party’s respective stock price for purposes of evaluating whether additional share issuances are required to maintain the value of exchanged common shares equal to $650,000. As consideration for the amendment, we issued MCOA 618,000 shares of restricted common stock. We issued the common stock pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, available to the Company by Section 4(a)(2) promulgated thereunder due to the fact that it was an isolated issuance and did not involve a public offering of securities. On May 12, 2021, the parties agreed to operate a joint venture through a new Nevada corporation named MCOA Lynwood Services, Inc. The parties agreed to finance a regulated and licensed laboratory to produce various cannabis products under the legal framework outlined by the City of Lynwood, California, Los Angeles County and the State of California. The Registrant owns a controlling interest in Natural Plant Extract of California, Inc., which operates a licensed cannabis manufacturing operation in Lynwood, California. As its contribution the joint venture, MCOA agreed to purchase and install equipment for joint venture operations, which will then be rented to the joint venture, and also provide funding relating to marketing the products produced by the capital equipment. The Registrant agreed to provide use of its manufacturing and distribution licenses; access to its Lynwood, California facility; use of the specific areas within the Lynwood Facility suitable for the types of manufacturing selected by the joint venture; and, management expertise require to carry on the joint venture’s operations. Ownership of the joint venture was agreed to be 60% in us and 40% with MCOA. Royalties from profits realized as the result of sales of products from the joint venture was also agreed to be distributed as 60% to us and 40% to MCOA. | Note 7. 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, for a total amount of $81,941.55 into 694,902 common shares. As of August 31, 2020, the carrying value of the remaining note with the former chief financial officer was $15,884, net of debt discount of $37,884 and accrued interest was $3,138. 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 August 31, 2020, the carrying value of the note was $15,061, net of debt discount of $14,939 and accrued interest was $1,011. On August 31, 2020, the Company issued a convertible note payable and a note payable to Robert L. Hymers III in connection with the acquisition of an 18.8% equity interest in NPE. See Note 8. Se e Note 9 for further |
Note Payable
Note Payable | 9 Months Ended | 12 Months Ended |
May 31, 2021 | Aug. 31, 2020 | |
Note Payable | ||
Note Payable | Note 10. - Notes Payable On May 25, 2019, we 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 7- Notes Payable, Related Party and in Footnote 11 – 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 (see “Related Party Transactions”). 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. 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, any time 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. On June 15, 2020, the Company entered into a modification agreement relative to the February 12, 2020 issued notes. Pursuant to the modification agreement, the Company issued a promissory note to Lantos in the amount of five hundred thousand dollars ($500,000). The Company may prepay the note in whole or in part at any time or from time to time without penalty or premium by paying the principal amount to be prepaid. The aggregate unpaid principal amount of the note is paid in monthly payments of seven thousand, five hundred dollars ($7,500) beginning on September 1, 2020, terminating on February 1, 2025. There is no interest on the note or on the unpaid balance. As of May 31, 2021, the carrying value of the notes was $450,000 and accrued interest payable was $46,750. As of August 31, 2020, the carrying value of the notes was $450,000 and accrued interest payable was $19,824. 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, any time 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, 2021, the carrying value of the note was $100,000 and accrued interest payable was $10,389. As of August 31, 2020, the carrying value of the note was $100,000 and accrued interest payable was $4,405. | Note 6 - Notes Payable On January 9, 2014, the Company issued a $70,000 note payable to a shareholder of the Company. The note payable bears interest at an annual rate of 7%, which then increased to 10% after it was in default. Principal and accrued interest on the note payable were due on January 9, 2016, with a default annual rate of 10% interest after that date. The outstanding balance of principal and accrued interest may be prepaid without penalty. During the years ended August 31, 2018 and August 31, 2017, the Company recorded an interest expense of $6,999, respectively, related to the note payable. As of August 31, 2018, the original principal balance of $70,000 on the note payable remained outstanding, with accrued interest of $28,306. The note payable was not repaid on January 9, 2016 and was spun out to Lauderdale Holdings, LLC as part of the change in control. During the Fourth Quarter of 2019. Consequently, it is included as part of the $168,048 in 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. As of August 31, 2019 the remaining principal balance was forgiven and included as Cancellation of Debt income on the Income Statement for the year ended August 31, 2019. 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 7- Notes Payable, Related Party and in Footnote 11 – 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 (see “Related Party Transactions”). 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. 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 August 31, 2020, the carrying value of the notes was $450,000 and accrued interest payable was $19,824. The parties to the June 15, 2020 modification agreement were the Company and Lelantos, including its including without limitation its shareholders, owners, affiliates, control persons, successors and assigns, including, but not limited to, Mt. Fire, LLC, a Nevada limited liability company (“Mt. Fire”), Ma Helen M. Am Is, Inc., a Wyoming Corporation (“Helen M.”), New Horizons Laboratory Services, Inc., a Wyoming Corporation (“New Horizons”), and East West Pharma Group, Inc., a Wyoming Corporation (“East – West”) (or collectively, “Lelantos”). There is no material relationship between the Registrant or its affiliates and Lelantos, Helen M., East West, Mt. Fire, New Horizons, or any of their respective affiliates, other than in respect of the June 15, 2020 modification agreement. Pursuant to the June 20, 2020 modification agreement, the Company and Lelantos agreed to the following material modifications to the material definitive agreement as follows; 1) The Registrant shall have no obligation to issue 400,000 common shares under Section 3.1 of the previously disclosed acquisition agreement, 2) The Sellers acquisition notes referenced in the February 20 ,2020 agreement were all cancelled with prejudice to any and all rights of any kind whatsoever pertaining to and in favor of Helen M., New Horizons, and East – West. (The Company and East – West previously terminated their note on May 31, 2020, and 3) As complete and full consideration for the acquisition of the intellectual property, trade secrets, research and development and associated pending patent applications, the agreed to pay to Lelantos, a purchase price of five hundred thousand dollars ($500,000), payable by the issuance of a promissory note. 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, any time 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 August 31, 2020, the carrying value of the note was $100,000 and accrued interest payable was $4,405. |
Convertible Note Payable
Convertible Note Payable | 9 Months Ended | 12 Months Ended |
May 31, 2021 | Aug. 31, 2020 | |
Notes to Financial Statements | ||
Convertible Note Payable | Note 11. Convertible Notes Payable On March 19, 2020, we 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, which contain certain exercise price reset provisions in the event of dilutive issuances. 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. On July 10, 2020, the third 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 an initial price of $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. During the nine months ended May 31, 2021, the Company repaid all principal and accrued interest in full. On July 21, 2020, the Company issued a convertible promissory note with a principal amount of $78,750, with the Company receiving proceeds of $71,250 after original issue discount of $3,750 and deferred finance costs of $3,750. The note matures on July 21, 2021 and bears interest at 6% per annum. 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 60% of the lowest closing trade price of the Company’s common stock, subject to adjustment, during the 30 trading days prior to: the conversion date. As a result of the OID and the variable conversion price, upon issuance, the Company recognized total debt discount of $78,750, which is being amortized to interest expense through the maturity date. 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. During the nine months ended May 31, 2021, the note and accrued interest were repaid in full. In August 2020, the Company issued two convertible promissory notes with an aggregate principal amount of $129,250, with the Company receiving proceeds of $117,500 after original issue discount of $11,750. The notes mature in May 2021 and bear interest at 10% per annum. 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 fixed price of $0.1005 per share of common stock. The conversion price may reset to a lower price if the Company issues common stock to any suppliers or vendors. As a result of the OID and the potential result for dilutive issuances, upon issuance, the Company recognized total debt discount of $129,250, which is being amortized to interest expense through the maturity date. 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. During the nine months ended May 31, 2021, the two notes and accrued interest were repaid in full. The Company also entered into common stock subscription agreements with this lender, totaling share issuances of 3,409,221 (of which 510,204 are to be issued as of August 31, 2020), for cash proceeds of $329,613. In connection with these subscriptions, the Company issued a convertible promissory note of $50,000 for no consideration. The note matures on August 7, 2021 and bears interest at 10$% and is convertible at a fixed price of $0.1631 per share, subject to potential rest in the event the Company issues shares to vendors or suppliers. The Company recognized total debt discount of $50,000, 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. During the nine months ended May 31, 2021, the note and accrued interest was repaid in full. During the nine months ended May 31, 2021, the Company issued four convertible promissory notes to a lender with an aggregate principal amount of $279,500, with the Company receiving proceeds of $267,000 after deferred finance costs of $12,500. The notes mature in August, September, October and December 2021 and bear interest at 8% per annum. Commencing one hundred eighty (180) days following the issuance date of the note, 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 variable conversion prices of 63% of the two lowest trading prices during previous fifteen (15) trading day of the Company’s common stock, subject to adjustment. 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 a result of the variable exercise price and deferred finance costs, the Company recognized total debt discount of $279,500, which is being amortized to interest expense through the maturity date. 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. During the nine months ended May 31, 2021, the four notes with principal of $279,500 and accrued interest of $11,007 were repaid in full. On September 2, 2020, the Company issued a convertible promissory note with an aggregate principal amount of $107,000, with the Company receiving proceeds of $100,000 after original issue discount of $5,000 and deferred finance costs of $2,000. The notes mature in September 2021 and bear interest at 12% per annum. Commencing one hundred eighty (180) days following the issuance date 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 price of 60% of the lowest previous twenty (20) trading day closing trade prices of the Company’s common stock, subject to adjustment. 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 a result of the variable exercise price and deferred finance costs, upon issuance, the Company recognized total debt discount of $107,000, which is being amortized to interest expense through the maturity date. This note was repaid in full during the nine months ended May 31, 2021, together with accrued interest of $5,101. On January 5, 2021, the Company entered into a Securities Purchase Agreement in connection with the issuance of a 10% convertible note with the principal amount of $110,000, with an accredited investor. The note is convertible at a fixed conversion price of $0.005. In the event of default by the Company, or after the public announcement of a change of control transaction as defined in the agreement, the conversion price is $0.001. The Company received net proceeds of $97,500. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $110,000, which is being amortized to interest expense through the maturity date. As of May 31, 2021, the carrying value of the note was $58,828, net of discount of $51,172, and accrued interest was $4,400. On January 12, 2021, the Company entered into a Securities Purchase Agreement in connection with the issuance of a 10% convertible note with the principal amount of $115,500, with an accredited investor. The note is convertible beginning 61 days from issuance at a fixed conversion price of $0.10 per share or 60% or the lowest trading price for ten days prior to conversion in the event that the Company’s stock trades at less than $0.10 per share. The Company received net proceeds of $100,000. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $115,500, which is being amortized to interest expense through the maturity date. During the nine months ended May 31, 2021, the lender converted principal and accrued interest of $57,750 and $585 into 583,354 shares of common stock. As of May 31, 2021, the carrying value of the note was $101,735, net of discount of $13,765, and accrued interest was $3,813. On January 26, 2021, the Company entered into a Securities Purchase Agreement in connection with the issuance of a 10% convertible note with the principal amount of $243,875, with an accredited investor. The note is convertible at 70% of the average of the three lowest trading prices for 20 days prior to conversion. The Company received net proceeds of $215,500. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $243,875, which is being amortized to interest expense through the maturity date. As of May 31, 2021, the carrying value of the note was $55,144, net of discount of $160,356, and accrued interest was $8,352. On January 26, 2021, the Company entered into a second Securities Purchase Agreement in connection with the issuance of a 10% convertible note with the principal amount of $243,875, with an accredited investor. The note is convertible at 70% of the average of the three lowest trading prices for 20 days prior to conversion. The Company received net proceeds of $215,500. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $243,875, which is being amortized to interest expense through the maturity date. As of May 31, 2021, the carrying value of the note was $55,144, net of discount of $160,356, and accrued interest was $6,102. On February 28, 2021 the Company filed a Certificate of Designation of Preferences, Rights of Series B Preferred Stock. The Series B Convertible Preferred stock has 1,000,000 shares authorized, has a par value of $0.001 per share and a stated value of $1.00. Each share of Series B Preferred Stock will carry an annual dividend in the amount of eight percent (8%) of the Stated Value (the “Divided Rate”), which shall be cumulative, payable solely upon redemption, liquidation or conversion. Upon the occurrence of an Event of Default (as defined herein), the Dividend Rate shall automatically increase to twenty two percent (22%). Based on the terms of the Series B Preferred Stock Purchase Agreement, and in accordance with ASC 480-10, the instruments are accounted for as a liability. During the nine months ended May 31, 2021, the Company entered into four Series B Preferred Stock Purchase Agreements for an aggregate amount of $329,500, with an accredited investor. As of May 31, 2021, the carrying value of the liability was $60,660, net of discount of $268,840, and accrued interest was $4,852. On March 8, 2021, the Company entered into a second Securities Purchase Agreement in connection with the issuance of a 10% convertible note with the principal amount of $215,000, with an accredited investor. The note is convertible at 70% of the average of the three lowest trading prices for 20 days prior to conversion. The Company received net proceeds of $191,000. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $215,000, which is being amortized to interest expense through the maturity date. As of May 31, 2021, the carrying value of the notes was $49,479, net of discount of $165,521, and accrued interest was $4,948. On March 16, 2021, the Company entered into a second Securities Purchase Agreement in connection with the issuance of a 10% convertible note with the principal amount of $215,000, with an accredited investor. The note is convertible at 70% of the average of the three lowest trading prices for 20 days prior to conversion. The Company received net proceeds of $191,000. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $215,000, which is being amortized to interest expense through the maturity date. As of May 31, 2021, the carrying value of the note was $44,767, net of discount of $170,233, and accrued interest was $4,477. On May 20, 2021, the Company entered into a second Securities Purchase Agreement in connection with the issuance of a 8% convertible note with the principal amount of $130,000, with an accredited investor. The note is convertible at 60% of the average of the three lowest trading prices for 15 days prior to conversion. The Company received net proceeds of $108,000. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $130,000, which is being amortized to interest expense through the maturity date. As of May 31, 2021, the carrying value of the note was $3,918, net of discount of $126,082, and accrued interest was $313. 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 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. On December 9, 2020, Mr. Hymers converted all principal of $53,768 and all accrued interest of $4,626 into 878,190 shares of common stock. On April 30, 2020, the Company entered into a settlement agreement with its former 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. On October 9, 2020, Mr. Hymers converted the note payable into 1,500,000 shares of common stock. On August 21, 2020 the Company, issued a convertible note pursuant to a Stock Purchase Agreement (the “SPA) to acquire 266,667 shares of common stock of Natural Plant Extract of California Inc., a California corporation (“NPE”), representing 18.8% of the outstanding capital stock of NPE on a fully diluted basis. With the exception of the entry into the subject material definitive agreements, no material relationship exists between the Registrant, or any of the Registrant’s affiliates or control persons and Hymers. Under the terms of the SPA, the Registrant acquired all rights and responsibilities of the equity stake for a purchase price of Two Million Forty Thousand United States Dollars ($2,040,000) (the “Purchase Price”). Relative to the payment of the Purchase Price, the registrant agreed to: 1) pay Hymers Twenty Thousand United States Dollars ($20,000) each month for a period of twenty-seven (27) months, with the first payment commencing September 1, 2020 and the remaining payments due and payable on the first day of each subsequent month until Hymers has received Five Hundred Forty Thousand United Stated Dollars ($540,000), and 2) issue Hymers a convertible promissory note in the amount of One Million Five Hundred Thousand United States Dollars ($1,500,000) (the “Note”). The Note bears interest at ten percent (10%) per annum. The Holder shall have the right at any time six (6) months after the Issuance Date to convert all or any part of the outstanding and unpaid principal, interest, fees, or any other obligation owed pursuant to the note. Conversion Price shall be calculated as follows: 60% of the lowest Trading Price of the common shares during the ten (10) days preceding the date the Company receive a notice of conversion. Unless permitted by the applicable rules and regulations of the principal securities market on which the Common Stock is then listed or traded, in no event shall the Registrant issue upon conversion of or otherwise pursuant to the note and the other notes issued more than the maximum number of shares of Common Stock that the Company can issue pursuant to any rule of the principal United States securities market on which the Common Stock is then traded, which shall be 4.99% of the total shares outstanding at any time. A debt discount of $54,212 on the note payable at issuance was calculated based on the present value of the note using an implied interest rate of 10%. A debt discount of $270,886 was recognized. Accordingly, the Company recorded an initial value of its investment in NPE of $1,714,903. At the time the note becomes convertible, the Company will recognize a derivative liability at fair value related to the embedded conversion option at that time. Prior to these transactions, Robert Hymers III and Alan Tsai each sold equity interest representing a total of 18.8% of the outstanding equity interest of NPE to Edward Manolos, a Director and preferred stockholder of the Company in a private transaction. As a result of these transactions, the Company beneficially controls approximately 56.5% of the equity of NPE. After this transaction, a Better World Ventures LLC controls 40% of the equity interests in NPE and one other entity controls 3.5%. During the three months ended May 31, 2021, Robert Hymers elected to converted $576,000 of the principal on the $1,500,000 note into 9,600,000 shares of common stock in accordance with the terms of the agreement. As of May 31, 2021, the Company was in default of the $540,000 note payable to Robert Hymers. On January 3, 2021, the Company entered into a settlement agreement with Robert Hymers concerning five delinquent payments totaling $100,000, whereby 1,585,791 shares of common stock were issued in settlement of those payments. As of February 28, 2021, the Company missed five additionally $20,000 payments, and remains in default of this agreement. On June 11, 2021, subsequent to the closing of the reported fiscal period ending on May 31, 2021, the Company entered into an agreement with Robert Hymers. As of the date of the amendment, the Company owed Mr. Hymers $440,000. The parties agreed to exchange the Company’s obligations to make monthly payments under the stock purchase agreement for a Convertible Note for the same amount. See Subsequent Events section. | Note 8. 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. In August 2020, the Company repaid the notes in full, consisting of principal of $256,500, accrued interest of $13,772, and early repayment interest and penalties of $127,565. 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, which contain certain exercise price reset provisions in the event of dilutive issuances. 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. On July 10, 2020, the third 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 an initial price of $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 August 31, 2020, the carrying value of these notes was $37,088, net of debt discount of $62,912 and accrued interest was $3,431. On July 21, 2020, the Company issued a convertible promissory note with a principal amount of $78,750, with the Company receiving proceeds of $71,250 after original issue discount of $3,750 and deferred finance costs of $3,750. The note matures on July 21, 2021 and bears interest at 6% per annum. 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 60% of the lowest closing trade price of the Company’s common stock, subject to adjustment, during the 30 trading days prior to: the conversion date. As a result of the OID and the variable conversion price, upon issuance, the Company recognized total debt discount of $78,750, which is being amortized to interest expense through the maturity date. 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 August 31, 2020, the carrying value of these notes was $8,846, net of debt discount of $69,904 and accrued interest was $531. In August 2020, the Company issued two convertible promissory notes with an aggregate principal amount of $129,250, with the Company receiving proceeds of $117,500 after original issue discount of $11,750. The notes mature in May 2021 and bear interest at 10% per annum. 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 fixed price of $0.1005 per share of common stock. The conversion price may reset to a lower price if the Company issues common stock to any suppliers or vendors. As a result of the OID and the potential result for dilutive issuances, upon issuance, the Company recognized total debt discount of $129,250, which is being amortized to interest expense through the maturity date. 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 August 31, 2020, the carrying value of these notes was $8,452, net of debt discount of $120,798 and accrued interest was $632. The Company also entered into common stock subscription agreements with this lender, totaling share issuances of 3,409,221 (of which 510,204 are to be issued as of August 31, 2020), for cash proceeds of $329,613. In connection with these subscriptions, the Company issued a convertible promissory note of $50,000 for no consideration. The note matures on August 7, 2021 and bears interest at 10$% and is convertible at a fixed price of $0.1631 per share, subject to potential rest in the event the Company issues shares to vendors or suppliers. The Company recognized total debt discount of $50,000, 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 August 31, 2020, the carrying value of these notes was $3,288, net of debt discount of $46,712 and accrued interest was $329. 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 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 August 31, 2020, the carrying value of the remaining note with the former chief financial officer was $15,884, net of debt discount of $37,884 and accrued interest was $3,138. On April 30, 2020, the Company entered into a settlement agreement with its former 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 August 31, 2020, the carrying value of the note was $15,061, net of debt discount of $14,939 and accrued interest was $1,011. On August 21, 2020 the Company, issued a convertible note pursuant to a Stock Purchase Agreement (the “SPA) to acquire 266,667 shares of common stock of Natural Plant Extract of California Inc., a California corporation (“NPE”), representing 18.8% of the outstanding capital stock of NPE on a fully diluted basis. With the exception of the entry into the subject material definitive agreements, no material relationship exists between the Registrant, or any of the Registrant’s affiliates or control persons and Hymers. Under the terms of the SPA, the Registrant acquired all rights and responsibilities of the equity stake for a purchase price of Two Million Forty Thousand United States Dollars ($2,040,000) (the “Purchase Price”). Relative to the payment of the Purchase Price, the registrant agreed to: 1) pay Hymers Twenty Thousand United States Dollars ($20,000) each month for a period of twenty-seven (27) months, with the first payment commencing September 1, 2020 and the remaining payments due and payable on the first day of each subsequent month until Hymers has received Five Hundred Forty Thousand United Stated Dollars ($540,000), and 2) issue Hymers a convertible promissory note in the amount of One Million Five Hundred Thousand United States Dollars ($1,500,000) (the “Note”). The Note bears interest at ten percent (10%) per annum. The Holder shall have the right at any time six (6) months after the Issuance Date to convert all or any part of the outstanding and unpaid principal, interest, fees, or any other obligation owed pursuant to the note. Conversion Price shall be calculated as follows: 60% of the lowest Trading Price of the common shares during the ten (10) days preceding the date the Company receive a notice of conversion. Unless permitted by the applicable rules and regulations of the principal securities market on which the Common Stock is then listed or traded, in no event shall the Registrant issue upon conversion of or otherwise pursuant to the note and the other notes issued more than the maximum number of shares of Common Stock that the Company can issue pursuant to any rule of the principal United States securities market on which the Common Stock is then traded, which shall be 4.99% of the total shares outstanding at any time. A debt discount of $54,212 on the note payable at issuance was calculated based on the present value of the note using an implied interest rate of 10%. A debt discount of $270,886 was recognized. Accordingly, the Company recorded an initial value of its investment in NPE of $1,714,903. At the time the note becomes convertible, the Company will recognize a derivative liability at fair value related to the embedded conversion option at that time. Prior to these transactions, Robert Hymers III and Alan Tsai each sold equity interest representing a total of 18.8% of the outstanding equity interest of NPE to Edward Manolos, a Director and preferred stockholder of the Company in a private transaction. As a result of these two transactions, the Company beneficially controls approximately 37% of the equity of NPE. After this transaction, a venture capital company controls 40% of the equity interests in NPE, the Company, Alan Tsai and Edward Manolos each control 18.8% and one other entity controls 3.5%. The Company evaluated its interest in NPE as of August 31, 2020 under ASC 810. Management determined that it had a variable interest in NPE, but that NPE does not meet the definition of a variable interest entity, and does not have an indirect voting interest of greater than 50%. Based on these factors, the investment in NPE by the Company, the investment in NPE will be accounted for as an equity method investment under the measurement alternative available under ASC 321 with the Company recording its share of the profits and losses of NPE at each reporting period. The initial investment balance was $1,714,903 based on the initial fair value estimate of the note payable and convertible note payable issued as consideration for the investment. For the three months ended August 31, 2020, the Company recognized no equity method income or losses due and no impairment of the investment. See Note 9 for further discussion of the accounting treatment of the embedded conversion options of the above promissory notes payable as derivative liabilities. |
Derivative Liability and Fair V
Derivative Liability and Fair Value Measurements | 9 Months Ended | 12 Months Ended |
May 31, 2021 | Aug. 31, 2020 | |
Notes to Financial Statements | ||
Derivative Liability and Fair Value Measurements | Note 12. Derivative Liability and Far Value Measurement Upon the issuance of the convertible promissory notes with variable conversion prices and fixed conversion prices with reset provisions, 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 during the nine months ended May 31, 2021, the Company estimated the fair value of all embedded derivatives of $6,669,935 using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 318% to 378%, (3) risk-free interest rate of 0.04% to 0.13%, and (4) expected life of 0.75 years to 1.5 years. On May 31, 2021, the Company estimated the fair value of the embedded derivatives of $3,585,535 using the Black Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 318%, (3) risk-free interest rate of 0.01% to 0.05%, and (4) expected life of 0.3 to 1.25 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, 2021, 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, 2021 and August 31, 2020: May 31, 2021 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Derivative liability $ 3,385,535 $ — $ — $ 3,585,535 August 31, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Derivative liability $ 1,125,803 $ — $ — $ 1,125,803 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, 2021: Balance, August 31, 2020 $ 1,125,803 Transfers in due to issuance of convertible promissory notes 6,669,935 Transfers out due to repayments of convertible promissory notes (1,721,125 ) Transfers out due to conversions of convertible promissory notes (1,490,962 ) Change in derivative liability for the nine months ended May 31, 2021 (998,116 ) Balance, May 31, 2021 $ 3,585,535 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. | Note 9. Derivative Liability and Far Value Measurement Upon the issuance of the convertible promissory notes with variable conversion prices and fixed conversion prices with reset provisions, 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 during the year ended August 31, 2020, the Company estimated the fair value of all 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 0.13% to 1.60%, and (4) expected life of 0.75 to three years. On August 31, 2020, the Company estimated the fair value of the embedded derivatives of $1,125,803 using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 385%, (3) risk-free interest rate of 0.12%, and (4) expected life of 0.5 to 1.4 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 August 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 August 31, 2020 and August 31, 2019: August 31, Quoted Significant Significant Derivative liability $ 1,125,803 $ — $ — $ 1,125,803 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 August 31, 2020: Balance, August 31, 2019 $ — Transfers in due to issuance of convertible promissory notes 1,468,704 Transfers out due to repayments of convertible promissory notes (449,389 ) Transfers out due to conversions of convertible promissory notes (231,632 ) Mark to market to August 31, 2020 787,683 Balance, August 31, 2020 $ 1,125,803 Loss on change in derivative liability for the year ended August 31, 2020 $ 338,120 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. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Aug. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10 - Commitments and Contingencies The Company has entered into a lease for a production and warehouse facility located in Los Angeles, California to produce such products. The term of the lease is 12 months at a base price of $3,600 per month, beginning August 2019. The total financial obligation for the lease is $43,200. At this time the lease agreement has ended and the Company rents to same facility on a month to month basis. Our headquarters are located at 520 S. Grand Avenue, Suite 320, Los Angeles, California 90071 where we leased office space under a contract effective August 15, 2019, expiring on August 14, 2020. We now rent the premises on a month to month basis and paying $800 per month. |
Common Stock
Common Stock | 9 Months Ended | 12 Months Ended |
May 31, 2021 | Aug. 31, 2020 | |
Equity [Abstract] | ||
Common Stock | Note 13. Common Stock Subsequent to the closing of the fiscal year ending August 31, 2019, the Company affected a reverse split as of September 30, 2019, which had the effect of reducing the number of outstanding shares from 187,864,600 to 12,524,307. All share and per share amounts in this filing have been retrospectively adjusted to reflect the impact of the reverse stock split. As of May 31, 2021, there were 78,733,317 shares of Common Stock issued and outstanding. As of the date of this filing, July 12, 2021, there were 78,733,317 shares of Common Stock issued and outstanding. On June 17, 2021, the Company amended its articles of incorporation to increase the number of its authorized shares from 290 million to 500 million shares, par value $0.001 per share. | Note 11 - Common Stock Subsequent to the closing of the fiscal year ending August 31, 2019, the Company affected a reverse split as of September 30, 2019, which had the effect of reducing the number of outstanding shares from 187,864,600 to 12,524,307. All share and per share amounts in this filing have been retrospectively adjusted to reflect the impact of the reverse stock split. As of August 31, 2020, there were 27,082,419 shares of Common Stock issued and outstanding. 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. On May 20, 2020, we issued 1,000,000 common shares to a Tabular Investments LLC for consulting service provided to the Company. |
Preferred Stock
Preferred Stock | 9 Months Ended | 12 Months Ended |
May 31, 2021 | Aug. 31, 2020 | |
Equity [Abstract] | ||
Preferred Stock | Note 14. Preferred Stock There are 10,000,000 shares of preferred stock, par value $0.0001 per share, of the Company Preferred Stock in one or more series, and expressly authorized the Board of Directors of the Company. On December 16, 2019, the Board of Directors authorized the issuance of 8,000,000 preferred shares as “Series A Preferred Stock.” The Series A Preferred Stock is not convertible into any other form of Securities, including common shares, of the Company. Holders of Series A Preferred Stock shall be entitled to 50 votes for every Share of Series A Preferred Stock beneficially owned as of the record date for any shareholder vote or written consent. On May 28, 2020, Mr. Robert L. Hymers III, a former director and former chief financial officer, returned 2,000,000 Series A Preferred shares to the corporate treasury. As of February 28, 2021, there were 6,000,000 Series A Preferred shares issued and outstanding. On February 28, 2021, the Company designated 1,000,000 shares of Series B Convertible Preferred Stock (“Series B Convertible Preferred Stock”). The Series B Convertible Preferred Stock earns dividends at 8% per year, and is convertible into shares of common stock at a rate of 63% of the market price, based on the average of the two lowest trading prices during the previous 15 days. Additionally, the Series B Convertible Preferred Stock is mandatorily redeemable 16 months from the issuance date in cash. The Company entered into an agreement with an investor for 153,500 shares of Series B Convertible Preferred Stock on February 28, 2021 for a total purchase amount of $153,500, and an agreement with the same investor for 78,500 shares of Series B Convertible Preferred Stock for a purchase amount of $78,500. In March 2021, the Company received proceeds of $225,000. As of the end of the three-month reporting period ending May 31, 2021, there were 670,750 shares of Series B Convertible Preferred Stock issued and outstanding. | Note 12 - Preferred Stock There are 10,000,000 shares of preferred stock, par value $0.0001 per share, of the Company Preferred Stock in one or more series, and expressly authorized the Board of Directors of the Company. On December 16, 2019, the Board of Directors authorized the issuance of 8,000,000 preferred shares as “Series A Preferred Stock.” The Series A Preferred Stock is not convertible into any other form of Securities, including common shares, of the Company. Holders of Series A Preferred Stock shall be entitled to 50 votes for every Share of Series A Preferred Stock beneficially owned as of the record date for any shareholder vote or written consent. On May 28, 2020, Mr. Robert L. Hymers III, a former director and former chief financial officer, returned 2,000,000 Series A Preferred shares to the corporate treasury. As of August 31, 2020, there were 6,000,000 Series A Preferred shares issued and outstanding. |
Income Taxes
Income Taxes | 12 Months Ended |
Aug. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 13 – 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. August 31, 2020 August 31, 2019 Expected federal income tax benefit at statutory rate $ 1,041,213 $ 81,815 Nondeductible items (127,358 ) 1,068 Change in valuation allowance (913,855 ) (80,747 ) Income tax benefit $ — $ — Significant components of the Company’s deferred tax assets at August 31, 2020 and 2019 are as follows: August 31, 2020 August 31, 2019 Deferred tax assets: Net operating loss carryforwards $ 1,126,473 $ 212,618 Research and development credit carry forward 1,963 1,963 Total deferred tax assets 1,128,436 214,581 Less: valuation allowance (1,128,436 ) (214,581 ) Net deferred tax asset $ — $ — 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 August 31, 2020 available to offset future federal taxable income, if any, of approximately $5,337,000 which will fully expire by the fiscal year ended August 31, 2040. Accordingly, there is no current tax expense for the nine months ended August 31, 2020. In addition, the Company has research and development tax credit carry forwards of $1,963 at August 31, 2020, which are available to offset federal income taxes and fully expire by August 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 twelve months ended August 31, 2020 and August 31, 2019. |
Subsequent Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
May 31, 2021 | Aug. 31, 2020 | |
Subsequent Events [Abstract] | ||
Subsequent Events | Note 15. Subsequent Events Subsequent to May 31, 2021, the Company repaid two convertible notes payable with aggregate principal of $47,009.22. On June 9, 2021, the Company entered into an amendment of a material definitive agreement previously entered into on September 30, 2020. The parties to the amended agreement are the Registrant and Marijuana Company of America, Inc. There is no material relationship between the Registrant and Marijuana Company of America, Inc. other than with respect to the material definitive agreement. The Registrant and Marijuana Company of America amended the previously disclosed share exchange agreement to: (i) jointly waive the provisions of a lock up leak out agreement applicable to the share exchange. The lock up leak out agreement prevented sale of the exchanged stock for a period of 12 months following issuance, and limited the subsequent sale to aggregate maximum sale value of $20,000 per week, or $80,000 per month; and, (ii) delete Article II, Sections 2.3 and 2.4 providing for quarterly review of each parties stock price, possibly resulting in additional issuances of shares of common stock to true up the Parties respective holdings of exchanged shares in the event that the Parties price for its respective common stock yielded a value of less than $650,000. The amended agreement also required the Company to issue an additional 618,000 shares of unregistered common stock to Marijuana Company of America, Inc., in consideration for a release of claims related to the Registrant’s failure to conduct quarterly reviews pursuant to Article II, Sections 2.3 and 2.4. On June 11, 2021, the Registrant and Robert L. Hymers, III amended a material definitive agreement originally entered into on August 31, 2020, previously reported on Form 8-K on September 1, 2020. The August 31, 2020 agreement obligated the Registrant to pay Mr. Hymers $20,000 per month, to retire a $540,000 debt connected to a stock purchase agreement, whereby the Registrant acquired 266,667 shares of common stock of Natural Plant Extract of California Inc. As of the date of the amendment, the Registrant owed Mr. Hymers $440,000. The parties agreed to exchange the Registrant’s obligations to make monthly payments under the stock purchase agreement for a Convertible Note for the same amount with a conversion price of $0.04 per share. On June 11, 2021, director Jim Riley resigned. Mr. Riley did not hold any other positions with the Registrant, and did not participate in any committee of the board. Mr. Riley’s decision to resign as director was not due to any disagreement with the Registrant. On June 16, 2021, the Company sold a convertible note to an accredited investor for proceeds of $135,000 at 8% per annum with a maturity date of June 16, 2022 with a Variable Conversion Price at a discount rate of 35% for the average of the two (2) lowest Trading Prices for the Common Stock during the fifteen (15) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. On June 17, 2021, the Company amended its articles of incorporation to increase the number of its authorized shares from 290 million to 500 million shares, par value $0.001 per share. | Note 14. Subsequent Events In August 2020, the Company issued a convertible promissory note with a principal amount of $113,000, with the Company receiving proceeds of $100,000 after original issue discount of $5,000 and deferred finance costs of $2,000 in September 2020. As a result of the timing of receipt of the proceeds, no amounts related to this convertible note payable were recognized in the Company’s financial statements as of August 31, 2020. The note matures in August 2021 and bears interest at 8% per annum. Commencing one hundred eighty (180) days following the issuance date of the note, 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 variable conversion prices of 63% of the two lowest trading prices during previous fifteen (15) trading day of the Company’s common stock, subject to adjustment. 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. On September 2, 2020, the Company issued two convertible promissory notes with an aggregate principal amount of $107,000, with the Company receiving proceeds of $100,000 after original issue discount of $5,000 and deferred finance costs of $2,000. The notes mature in September 2021 and bear interest at 12% per annum. Commencing one hundred eighty (180) days following the issuance date 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 price of 60% of the lowest previous twenty (20) trading day closing trade prices of the Company’s common stock, subject to adjustment. 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. On September 22, 2020, the Company issued a convertible note in the amount of $78,000. The note matures on September 22, 2021 and bears 8% interest rate per annum. The note is convertible into common shares at 37% discount for the average of the two lowest trading price of the common stock during the 15 trading day period ending on the latest complete trading day prior to the conversion date. On September 24, 2020, the Company issued a convertible note in the amount of $78,000. The note matures on June 24, 2021 and bears 10% interest rate per annum. The note is convertible into common shares at a fixed conversion price of $0.06 or a conversion discount at rate of 30% to the lowest trading price during the previous twenty (20) trading days to the date of a conversion notice; whichever is lower. On September 30, 2020, the Company entered into a securities exchange agreement with Marijuana Company of America, Inc., a Utah corporation (“MCOA”). By virtue of the agreement, the Company issued 7,222,222 shares of its unregistered common stock to MCOA in exchange for 650,000,000 shares of MCOA unregistered common stock. The Company and MCOA also entered into a lock up leak out agreement which prevents either party from sales of the exchanged shares for a period of 12 months. Thereafter the parties may sell not more than the quantity of shares equaling an aggregate maximum sale value of $20,000 per week, or $80,000 per month until all Shares and Exchange Shares are sold. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
May 31, 2021 | Aug. 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). We evaluate all of our 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, we use 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. and Natural Plant Extract of California, Inc. All intercompany balances and transactions have been eliminated in consolidation. | Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Variable Interest Entities | Variable Interest Entities The Company accounts for arrangements that are not controlled through voting or similar rights as variable interest entities (“VIEs”). An enterprise is required to consolidate a VIE if it is the primary beneficiary of the VIE. A VIE is created when (i) the equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support from other parties, or (ii) the entity’s equity holders as a group either: (a) lack the power, through voting or similar rights, to direct the activities of the entity that most significantly impact the entity’s economic performance, (b) are not obligated to absorb expected losses of the entity if they occur, or (c) do not have the right to receive expected residual returns of the entity if they occur. If an entity is deemed to be a VIE, the enterprise that is deemed to have a variable interest, or combination of variable interests, that provides the enterprise with a controlling financial interest in the VIE, is considered the primary beneficiary and must consolidate the VIE. Investments where the Company has significant influence, but not control, and joint ventures which are VIEs in which the Company is not the primary beneficiary, are recorded under the equity method of accounting on the accompanying consolidated financial statements. As of August 31, 2020, the Company held a variable interest in an entity for which it directly held an 18.8% equity interest, and indirectly controlled 37.6% of the equity. The entity was not determined to be a VIE under ASC 810, as it did not meet the criteria outlined above. Since the Company indirectly controls less than 50% of the voting interest of the entity, the entity is not consolidated, and the Company accounts for the investment under the equity method of accounting in accordance with ASC 321. Since the entity in which the Company holds its investment does not have a readily determinable fair value, the Company elected to account for the investment under the measurement alternative, accounting for the investment at cost less impairment, plus or minus any changes resulting from observable price changes in orderly transactions for the same investment. See Note 8 for additional information on this investment. | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The extent to which the COVID-19 pandemic impacts the Company’s business and financial results will depend on numerous evolving factors including, but not limited to: the magnitude and duration of the COVID-19 pandemic, the extent to which it will impact worldwide macroeconomic conditions, the speed of the anticipated recovery, and governmental and business reactions to the pandemic. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 as of August 30, 2020 and through the date of this report. The matters assessed included accounts receivable and the carrying value of investments, intangible assets and other long-lived assets. The Company’s future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in additional material impacts to the Company’s consolidated financial statements in future reporting periods. | |
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. | 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, 2021, and August 31, 2020, market values of all of our inventory were at cost, and accordingly, no such valuation allowance was recognized. | Inventory Inventory is primarily comprised of work in progress. Inventory is valued at cost, based on the specific identification method, unless and until the net realizable value for the inventory is lower than cost, in which case an allowance is established to reduce the valuation to the net realizable value. As of August 31, 2020, and August 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, 2021. | 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 August 31, 2020 or August 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. | 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, 2021, and May 31, 2020, we had $0 and $0 allowance for doubtful accounts, respectively. | 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 August 31, 2020, and August 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.” | 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 is reviewed for impairment as discussed below under “Accounting for the Impairment of Long-Lived Assets.” We did not capitalize any interest as of August 31, 2020, and as of August 31, 2019. |
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. | 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 year ended August 31, 2020, and August 31, 2019. |
Beneficial Conversion Feature | Beneficial Conversion Feature 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 | 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 services or 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 consulting and product sales contracts. We examine and evaluate when our customers become liable to pay for goods and services; how much consideration is paid as compared to the cash selling price of the goods or services; and, the length of time between our performance and the receipt of payment. | 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 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 services or products contain significant financing components that require revenue adjustment under FASB ASC Topic 606. In accordance with FASB ASC Topic 606, Revenue Recognition, we recognize revenue when persuasive evidence of a significant financing component exists in our consulting and product sales contracts. We examine and evaluate when our customers become liable to pay for goods and services; how much consideration is paid as compared to the cash selling price of the goods or services; 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. 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. | Product Sales Revenue from product sales, including delivery fees, is recognized at a point in time when control of the promised goods is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods. 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. | Costs of Revenues Our policy is to recognize costs of revenue in the same manner in conjunction with revenue recognition. Cost of revenues include the costs directly attributable to revenue recognition and includes 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. Stock-based compensation during the quarterly reporting period ended May 31, 2021 was $0. | 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, 2021 and February 28, 2021, we incurred no income taxes and had no liabilities related to federal or state 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 year ended August 31, 2020 and August 31, 2019 we incurred no income taxes. As of August 31, 2020, and August 31, 2019, we had no liabilities related to federal or state income taxes. |
Other Tax Related Policies | Other Tax Related Policies Incentive Stock Options. Nonstatutory Stock Options. Restricted Stock. Stock Units. Stock Appreciation Rights. Income Tax Effects for the Company. Internal Revenue Code Section 162(m) Deduction Limitation. Internal Revenue Code Section 280G. Certain types of nonqualified deferred compensation arrangements | |
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. | 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. | 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. |
Acquisition of Natural Plant _2
Acquisition of Natural Plant Extract of California, Inc. (Tables) | 9 Months Ended |
May 31, 2021 | |
Notes to Financial Statements | |
Schedule of Preliminary Purchase Price Allocation | The following information summarizes the provisional purchase consideration and preliminary allocation of the fair values assigned to the assets at the purchase date: Preliminary Purchase Price Allocation: Cash 2,200 Accounts receivable 193,607 Notes receivable 162,247 Property and equipment 1,338,569 Right of use asset – operating lease 607,306 Goodwill 8,098,603 Total assets acquired $ 10,402,532 Accounts payable and accrued expenses 289,591 Right of use liability – operating lease 607,306 Notes payable 1,825,101 Notes payable – related party 105,539 Total Liabilities Assumed $ 2,827,537 |
Schedule of Unaudited Pro Forma Financial Information | The following table sets forth the pro-forma consolidated results of operations for the three and nine months ended May 31, 2021 and 2020 as if the NPE acquisition occurred on September 1, 2019. The pro forma results of operations are presented for informational purposes only and are not indicative of the results of operations that would have been achieved if the acquisitions had taken place on the dates noted above, or of results that may occur in the future. For the three months ended For the nine months ended May 31, 2021 Pro Forma May 31, 2020 Pro Forma May 31, 2021 Pro Forma May 31, 2020 Pro forma Revenue $ 1,041,495 $ 515,808 $ 1,920,357 $ 888,297 Operating loss (1,777,302 ) (1,303,011 ) (2,122,931 ) (2,266,320 ) Net loss attributable to common shareholders of Cannabis Global (3,997,263 ) (2,807,892 ) (6,781,353 ) (4,319,901 ) Net loss per common share $ (0.06 ) $ (0.11 ) $ (0.12 ) $ (0.17 ) |
Derivative Liability and Fair_2
Derivative Liability and Fair Value Measurements (Tables) | 9 Months Ended | 12 Months Ended |
May 31, 2021 | Aug. 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, 2021 and August 31, 2020: May 31, 2021 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Derivative liability $ 3,385,535 $ — $ — $ 3,585,535 August 31, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Derivative liability $ 1,125,803 $ — $ — $ 1,125,803 | Items recorded or measured at fair value on a recurring basis in the accompanying financial statements consisted of the following items as of August 31, 2020 and August 31, 2019: August 31, Quoted Significant Significant Derivative liability $ 1,125,803 $ — $ — $ 1,125,803 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, 2021: Balance, August 31, 2020 $ 1,125,803 Transfers in due to issuance of convertible promissory notes 6,669,935 Transfers out due to repayments of convertible promissory notes (1,721,125 ) Transfers out due to conversions of convertible promissory notes (1,490,962 ) Change in derivative liability for the nine months ended May 31, 2021 (998,116 ) Balance, May 31, 2021 $ 3,585,535 | The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities for the nine months ended August 31, 2020: Balance, August 31, 2019 $ — Transfers in due to issuance of convertible promissory notes 1,468,704 Transfers out due to repayments of convertible promissory notes (449,389 ) Transfers out due to conversions of convertible promissory notes (231,632 ) Mark to market to August 31, 2020 787,683 Balance, August 31, 2020 $ 1,125,803 Loss on change in derivative liability for the year ended August 31, 2020 $ 338,120 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Aug. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax | 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. August 31, 2020 August 31, 2019 Expected federal income tax benefit at statutory rate $ 1,041,213 $ 81,815 Nondeductible items (127,358 ) 1,068 Change in valuation allowance (913,855 ) (80,747 ) Income tax benefit $ — $ — |
Deferred income taxes | Significant components of the Company’s deferred tax assets at August 31, 2020 and 2019 are as follows: August 31, 2020 August 31, 2019 Deferred tax assets: Net operating loss carryforwards $ 1,126,473 $ 212,618 Research and development credit carry forward 1,963 1,963 Total deferred tax assets 1,128,436 214,581 Less: valuation allowance (1,128,436 ) (214,581 ) Net deferred tax asset $ — $ — |
Organization and Description _2
Organization and Description of Business (Details Narrative) - USD ($) | Jun. 09, 2021 | May 12, 2021 | Jan. 03, 2021 | Jun. 15, 2020 | Jan. 27, 2021 | Nov. 16, 2020 | Sep. 30, 2020 | Aug. 31, 2020 | Jul. 22, 2020 | May 25, 2019 | Sep. 25, 2007 | Feb. 16, 2021 | May 31, 2021 | May 31, 2020 | Aug. 31, 2020 | Aug. 31, 2019 | Jul. 12, 2021 | Jun. 17, 2021 | Sep. 30, 2019 | Jul. 01, 2019 | Aug. 22, 2007 |
Common stock, par or stated value per share (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.0001 | ||||||||||||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | 290,000,000 | 300,000,000 | ||||||||||||||||
Common stock, shares issued | 27,082,419 | 1,000,000 | 78,733,317 | 27,082,419 | 12,524,307 | ||||||||||||||||
Common stock, shares outstanding | 27,082,419 | 1,000,000 | 78,733,317 | 27,082,419 | 12,524,307 | 12,524,307 | |||||||||||||||
Preferred stock, shares issued | 6,000,000 | 0 | 6,000,000 | 6,000,000 | 6,000,000 | ||||||||||||||||
Preferred stock, shares outstanding | 6,000,000 | 0 | 6,000,000 | 6,000,000 | 6,000,000 | ||||||||||||||||
Forward split | 538,646 for 1 | ||||||||||||||||||||
Common stock, shares sold | 3,000,000 | ||||||||||||||||||||
Proceeds from sale of common stock | $ 177,000 | ||||||||||||||||||||
Issuance promissory note | $ 0 | $ 0 | $ 0 | $ 42,504 | |||||||||||||||||
Ethos Technology LLC [Member] | |||||||||||||||||||||
Shares issued for business acquisition | 6,000,000 | ||||||||||||||||||||
Subsequent Event [Member] | |||||||||||||||||||||
Common stock, par or stated value per share (in dollars per share) | $ 0.001 | ||||||||||||||||||||
Common stock, shares authorized | 500,000,000 | ||||||||||||||||||||
Common stock, shares issued | 78,733,317 | ||||||||||||||||||||
Common stock, shares outstanding | 78,733,317 | ||||||||||||||||||||
Stock Purchase Agreement | |||||||||||||||||||||
Common stock, shares issued | 266,667 | 266,667 | 266,667 | ||||||||||||||||||
Shares issued for business acquisition | 266,667 | ||||||||||||||||||||
Chief Executive Officer [Member] | |||||||||||||||||||||
Accounts Payable | $ 1,000 | ||||||||||||||||||||
Whisper [member] | |||||||||||||||||||||
Stock-based compensation, shares | 666,754 | ||||||||||||||||||||
Stock-based compensation, value | $ 116,282 | ||||||||||||||||||||
Restricted common stock | $ 150,000 | ||||||||||||||||||||
Hymers [Member] | Settlement Agreement [Member] | |||||||||||||||||||||
Stock issued under agreement | 1,585,791 | ||||||||||||||||||||
Edward Manolos [Member] | |||||||||||||||||||||
Common stock, shares sold | 1,500,000 | ||||||||||||||||||||
Edward Manolos [Member] | Ethos Technology LLC [Member] | |||||||||||||||||||||
Shares issued for business acquisition | 1,500,000 | ||||||||||||||||||||
Additional shares issued to related parties | 1,500,000 | ||||||||||||||||||||
Thang Nguyen [Member] | |||||||||||||||||||||
Common stock, shares sold | 1,500,000 | ||||||||||||||||||||
Thang Nguyen [Member] | Ethos Technology LLC [Member] | |||||||||||||||||||||
Shares issued for business acquisition | 1,500,000 | ||||||||||||||||||||
Additional shares issued to related parties | 1,500,000 | ||||||||||||||||||||
Shareholder | Stock Purchase Agreement | |||||||||||||||||||||
Common stock purchase price | $ 2,040,000 | $ 1,436,368 | $ 2,040,000 | ||||||||||||||||||
Mr. Manolos | |||||||||||||||||||||
Shares issued for business acquisition | 266,667 | ||||||||||||||||||||
Additional shares issued to related parties | 11,383,929 | ||||||||||||||||||||
Lelantos | |||||||||||||||||||||
Issuance promissory note | $ 500,000 | ||||||||||||||||||||
Common stock, shares issued | 400,000 | ||||||||||||||||||||
Lauderdale Holdings, LLC [Member] | |||||||||||||||||||||
Common stock, shares outstanding, percentage | 70.70% | ||||||||||||||||||||
Lauderdale Holdings, LLC [Member] | Mr. Robert Hymers [Member] | |||||||||||||||||||||
Common stock, shares sold | 43,333,333 | ||||||||||||||||||||
Proceeds from sale of common stock | $ 108,333 | ||||||||||||||||||||
Lauderdale Holdings, LLC [Member] | Edward Manolos [Member] | |||||||||||||||||||||
Common stock, shares sold | 43,333,333 | ||||||||||||||||||||
Proceeds from sale of common stock | $ 108,333 | ||||||||||||||||||||
Lauderdale Holdings, LLC [Member] | Dan Nguyen [Member] | |||||||||||||||||||||
Common stock, shares sold | 43,333,333 | ||||||||||||||||||||
Proceeds from sale of common stock | $ 108,333 | ||||||||||||||||||||
Lauderdale Holdings, LLC [Member] | Unaffiliated Parties [Member] | |||||||||||||||||||||
Common stock, shares sold | 130,000,000 | ||||||||||||||||||||
Proceeds from sale of common stock | $ 325,000 | ||||||||||||||||||||
Marijuana Company of America, Inc [Member] | |||||||||||||||||||||
Shares issued for exchange of shares | 7,222,222 | ||||||||||||||||||||
Number of common stock exchanged | 650,000,000 | ||||||||||||||||||||
Cash contributed to joint venture | $ 135,000 | ||||||||||||||||||||
Marijuana Company of America, Inc [Member] | Subsequent Event [Member] | |||||||||||||||||||||
Value of common shares exchanged | $ 650,000 | ||||||||||||||||||||
Restricted common stock issued | 618,000 |
Going Concern Uncertainties a_2
Going Concern Uncertainties and Liquidity Requirements (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
May 31, 2021 | May 31, 2020 | May 31, 2021 | May 31, 2020 | Aug. 31, 2020 | Aug. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Accumulated Deficit | $ (11,329,224) | $ (11,329,224) | $ (6,056,949) | $ (1,127,601) | ||
Revenues | 940,491 | $ 19,750 | 970,717 | $ 29,753 | 27,004 | 0 |
Net loss | $ (2,808,281) | $ (2,748,569) | (5,272,275) | (3,896,202) | (4,929,348) | (389,597) |
Cash used in operating activities | $ (1,186,087) | $ (1,054,985) | $ (1,522,141) | $ (109,408) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
May 31, 2021 | May 31, 2021 | May 31, 2020 | Aug. 31, 2020 | Aug. 31, 2019 | |
Accounting Policies [Abstract] | |||||
Deposits | $ 0 | $ 0 | $ 0 | $ 0 | |
Allowance for doubtful accounts | 0 | 0 | 0 | 0 | |
Impairment charges | 0 | 0 | |||
Stock-based compensation | 0 | 0 | 0 | ||
Income taxes | 0 | $ 0 | $ 0 | $ 0 | |
Variable interest | 18.80% | ||||
Valuation allowance | $ 0 | $ 0 |
Net Loss Per Share (Details Nar
Net Loss Per Share (Details Narrative) | 9 Months Ended |
May 31, 2021USD ($)shares | |
Earnings Per Share [Abstract] | |
Conversion of Stock, Shares Converted | shares | 43,842,930 |
Convertible debt | $ | $ 1,103,654 |
Notes Receivable-Related Party
Notes Receivable-Related Party (Details Narrative) - USD ($) | Jul. 09, 2019 | Jul. 09, 2019 | Aug. 31, 2020 | May 31, 2021 | Aug. 23, 2019 | May 25, 2019 |
Note Payable | $ 0 | $ 995,043 | ||||
Repayment of note receivable | $ 40,000 | |||||
Dan Nguyen | ||||||
Note Payable | $ 1,666,667 | |||||
Interest Rate | 5.00% | |||||
Edward Manolos | ||||||
Note Payable | $ 1,666,667 | |||||
Interest Rate | 5.00% | |||||
Split Tee | ||||||
Notes Receivable | $ 20,000 | $ 20,000 | $ 0 | $ 20,000 | ||
Interest rate | 10.00% | |||||
Consulting fee | $ 5,000 | $ 5,000 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) | 1 Months Ended |
Jun. 15, 2020shares | |
Modification agreement | Lelantos | |
Common stock obligations | 400,000 |
Acquisition of Natural Plant _3
Acquisition of Natural Plant Extract of California, Inc. (Details) - USD ($) | May 31, 2021 | Feb. 16, 2021 | Aug. 31, 2020 |
Goodwill | $ 8,098,603 | $ 0 | |
NPE | |||
Cash | $ 2,200 | ||
Accounts receivable | 193,607 | ||
Notes receivable | 162,247 | ||
Property and equipment | 1,338,569 | ||
Right of use asset - operating lease | 607,306 | ||
Goodwill | 8,098,603 | ||
Total assets acquired | 10,402,532 | ||
Accounts payable and accrued expenses | 289,591 | ||
Right of use liability - operating lease | 607,306 | ||
Notes payable | 1,825,101 | ||
Notes payable - related party | 105,539 | ||
Total Liabilities Assumed | $ 2,827,537 |
Acquisition of Natural Plant _4
Acquisition of Natural Plant Extract of California, Inc. (Details 1) - Pro Forma [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2021 | May 31, 2020 | May 31, 2021 | May 31, 2020 | |
Revenue | $ 1,041,495 | $ 515,808 | $ 1,920,357 | $ 888,297 |
Operating loss | (1,777,302) | (1,303,011) | (2,122,931) | (2,266,320) |
Net loss attributable to common shareholders of Cannabis Global | $ (3,997,263) | $ (2,807,892) | $ (6,781,353) | $ (4,319,901) |
Net loss per common share | $ (0.06) | $ (0.11) | $ (0.12) | $ (0.17) |
Acquisition of Natural Plant _5
Acquisition of Natural Plant Extract of California, Inc. (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Feb. 16, 2021 | Jan. 27, 2021 | Aug. 31, 2020 | May 31, 2021 | May 31, 2020 | May 31, 2021 | May 31, 2020 | Aug. 31, 2020 | Aug. 31, 2019 | Aug. 21, 2020 | |
Revenue | $ 940,491 | $ 19,750 | $ 970,717 | $ 29,753 | $ 27,004 | $ 0 | ||||
Net loss | (2,715,963) | $ (2,748,569) | (5,179,957) | $ (3,896,202) | (4,929,348) | $ (389,597) | ||||
Mr. Manolos | ||||||||||
Shares issued for business acquisition | 266,667 | |||||||||
Additional shares issued to related parties | 11,383,929 | |||||||||
Additional fair value | $ 1,821,429 | |||||||||
NPE | ||||||||||
Ownership percentage | 56.50% | |||||||||
Fair value adjustment | $ 3,684,347 | |||||||||
Gain loss on investment | 359,391 | |||||||||
Non-controlling interest | $ 3,849,293 | |||||||||
Revenue | 933,125 | 951,989 | ||||||||
Net loss | $ 193,941 | $ 211,738 | ||||||||
Stock Purchase Agreement | ||||||||||
Shares issued for business acquisition | 266,667 | |||||||||
Stock Purchase Agreement | NPE | ||||||||||
Shares issued for business acquisition | 266,667 | |||||||||
Debt discount | $ 270,886 | 270,886 | $ 270,886 | |||||||
Initial investment | $ 1,714,903 | $ 1,714,903 | $ 1,714,903 | |||||||
Additional shares issued to related parties | 1,436,368 | |||||||||
Additional fair value | $ 400,747 | |||||||||
Ownership percentage | 4.99% | 4.99% | 4.99% |
Note Payable to Shareholders (D
Note Payable to Shareholders (Details Narrative) - USD ($) | May 31, 2021 | Aug. 31, 2020 | May 25, 2019 |
Note Payable | $ 995,043 | $ 0 | |
Edward Manolos | |||
Note Payable | $ 1,666,667 | ||
Interest Rate | 5.00% | ||
Dan Nguyen [Member] | |||
Note Payable | $ 1,666,667 | ||
Interest Rate | 5.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jun. 09, 2021 | Oct. 09, 2020 | Jul. 09, 2019 | Jul. 09, 2019 | May 08, 2018 | Jan. 27, 2021 | Nov. 16, 2020 | May 22, 2020 | Apr. 30, 2020 | Feb. 29, 2020 | Aug. 31, 2018 | May 31, 2018 | May 31, 2021 | Aug. 31, 2018 | Aug. 31, 2018 | Jul. 16, 2021 | Aug. 31, 2020 | Aug. 31, 2019 | Aug. 23, 2019 | May 25, 2019 |
Common stock, shares sold | 3,000,000 | |||||||||||||||||||
Proceeds from sale of common stock | $ 177,000 | |||||||||||||||||||
Sale of stock price per share | $ 0.001 | |||||||||||||||||||
Gain on Debt Cancellation | $ 168,048 | |||||||||||||||||||
Notes Payable, Related Party | $ 613,617 | $ 499,788 | $ 14,000 | |||||||||||||||||
Conversion of Stock, Shares Converted | 43,842,930 | |||||||||||||||||||
Beneficial conversion feature | 27,954 | |||||||||||||||||||
Note Payable | $ 995,043 | 0 | ||||||||||||||||||
Accrued interest payable | 209,843 | 33,301 | $ 0 | |||||||||||||||||
Former Chief Financial Officer [Member] | ||||||||||||||||||||
Conversion Price | $ 0.02 | |||||||||||||||||||
Carrying value | 15,061 | |||||||||||||||||||
Debt discount | 14,939 | |||||||||||||||||||
Accrued interest payable | 1,011 | |||||||||||||||||||
Notes Receivable | $ 30,000 | |||||||||||||||||||
Chief Financial Officer [Member] | ||||||||||||||||||||
Beneficial conversion feature | 30,000 | |||||||||||||||||||
Interest expense | $ 30,000 | |||||||||||||||||||
Carrying value | 15,884 | |||||||||||||||||||
Debt discount | 37,884 | |||||||||||||||||||
Accrued interest payable | 3,138 | |||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||
Principal amount | $ 47,009 | |||||||||||||||||||
Principal | Chief Financial Officer [Member] | ||||||||||||||||||||
Conversion of Stock, Shares Converted | 1,500,000 | |||||||||||||||||||
Two Convertible Promissory Notes | ||||||||||||||||||||
Interest Rate | 10.00% | |||||||||||||||||||
Principal amount | $ 133,101 | |||||||||||||||||||
Interest expense | $ 133,101 | |||||||||||||||||||
Split Tee | ||||||||||||||||||||
Interest rate | 10.00% | |||||||||||||||||||
Consulting fee | $ 5,000 | $ 5,000 | ||||||||||||||||||
Notes Receivable | $ 20,000 | $ 20,000 | $ 0 | $ 20,000 | ||||||||||||||||
Marijuana Company of America, Inc [Member] | Subsequent Event [Member] | ||||||||||||||||||||
Value of common shares exchanged | $ 650,000 | |||||||||||||||||||
Restricted common stock issued | 618,000 | |||||||||||||||||||
Ethos Technology LLC [Member] | ||||||||||||||||||||
Shares issued for business acquisition | 6,000,000 | |||||||||||||||||||
Mr. Manolos | ||||||||||||||||||||
Shares issued for business acquisition | 266,667 | |||||||||||||||||||
Additional shares issued to related parties | 11,383,929 | |||||||||||||||||||
Shares price | $ 0.1792 | |||||||||||||||||||
Edward Manolos [Member] | ||||||||||||||||||||
Common stock, shares sold | 1,500,000 | |||||||||||||||||||
Note Payable | $ 1,666,667 | |||||||||||||||||||
Interest Rate | 5.00% | |||||||||||||||||||
Edward Manolos [Member] | Ethos Technology LLC [Member] | ||||||||||||||||||||
Shares issued for business acquisition | 1,500,000 | |||||||||||||||||||
Additional shares issued to related parties | 1,500,000 | |||||||||||||||||||
Thang Nguyen [Member] | ||||||||||||||||||||
Common stock, shares sold | 1,500,000 | |||||||||||||||||||
Thang Nguyen [Member] | Ethos Technology LLC [Member] | ||||||||||||||||||||
Shares issued for business acquisition | 1,500,000 | |||||||||||||||||||
Additional shares issued to related parties | 1,500,000 | |||||||||||||||||||
Legal custodian | ||||||||||||||||||||
Gain on Debt Cancellation | $ 168,048 | |||||||||||||||||||
Notes Payable, Related Party | $ 10,000 | 10,000 | 10,000 | |||||||||||||||||
Legal custodian 1 | ||||||||||||||||||||
Notes Payable, Related Party | $ 35,554 | $ 35,554 | $ 35,554 | |||||||||||||||||
Conversion Price | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||||||
Conversion of Stock, Amount Converted | $ 13,000 | |||||||||||||||||||
Legal custodian 2 | ||||||||||||||||||||
Advances | $ 600 | |||||||||||||||||||
Interest rate | 10.00% | |||||||||||||||||||
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 | |||||||||||||||||||
Chief Financial Officer [Member] | ||||||||||||||||||||
Conversion Price | $ 0.02 | |||||||||||||||||||
Interest rate | 10.00% | |||||||||||||||||||
Beneficial conversion feature | $ 30,000 | |||||||||||||||||||
Carrying value | 15,884 | |||||||||||||||||||
Debt discount | 37,884 | |||||||||||||||||||
Accrued interest payable | 3,138 | |||||||||||||||||||
Notes Receivable | $ 30,000 | |||||||||||||||||||
Former Chief Financial Officer [Member] | ||||||||||||||||||||
Carrying value | 15,061 | |||||||||||||||||||
Debt discount | 14,939 | |||||||||||||||||||
Accrued interest payable | $ 1,011 | |||||||||||||||||||
Legal Custodian | ||||||||||||||||||||
Notes Payable, Related Party | $ 10,000 | $ 10,000 | $ 10,000 | |||||||||||||||||
Legal Custodian One | ||||||||||||||||||||
Notes Payable, Related Party | $ 35,554 | $ 35,554 | $ 35,554 | |||||||||||||||||
Conversion Price | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||||||
Conversion of Stock, Amount Converted | $ 13,000 | |||||||||||||||||||
Interest rate | 10.00% | |||||||||||||||||||
Legal Custodian Two | ||||||||||||||||||||
Notes Payable, Related Party | $ 600 | $ 600 | $ 600 | |||||||||||||||||
Advances | $ 600 | |||||||||||||||||||
Interest rate | 10.00% | |||||||||||||||||||
Accrued interest payable | $ 0 | $ 0 | $ 0 |
Convertible Note Payable (Detai
Convertible Note Payable (Details Narrative) - USD ($) | Mar. 08, 2021 | Jan. 12, 2021 | Jan. 05, 2021 | Dec. 09, 2020 | Oct. 09, 2020 | Sep. 02, 2020 | Nov. 06, 2019 | Mar. 20, 2021 | Mar. 16, 2021 | Jan. 26, 2021 | Aug. 31, 2020 | Aug. 21, 2020 | Jul. 22, 2020 | Jul. 21, 2020 | May 22, 2020 | Apr. 30, 2020 | Mar. 19, 2020 | May 31, 2021 | Feb. 29, 2020 | May 31, 2021 | May 31, 2020 | Aug. 31, 2020 | Aug. 31, 2019 | Aug. 31, 2018 | Feb. 16, 2021 |
Proceeds from Convertible debt | $ 1,891,000 | $ 691,269 | $ 673,284 | $ 33,334 | |||||||||||||||||||||
Accrued interest payable | $ 33,301 | $ 209,843 | $ 209,843 | 33,301 | $ 0 | ||||||||||||||||||||
Conversion of Stock, Shares Converted | 43,842,930 | ||||||||||||||||||||||||
Beneficial Conversion Feature | $ 27,954 | ||||||||||||||||||||||||
Repayment of convertible debt | $ 854,500 | $ 0 | |||||||||||||||||||||||
NPE | |||||||||||||||||||||||||
Beneficial ownership percentage | 56.50% | ||||||||||||||||||||||||
Chief Executive Officer [Member] | |||||||||||||||||||||||||
Principal amount | $ 79,333 | ||||||||||||||||||||||||
Robert L. Hymers III [Member] | |||||||||||||||||||||||||
Principal amount | 53,768 | ||||||||||||||||||||||||
Former Chief Financial Officer [Member] | |||||||||||||||||||||||||
Carrying value | 15,061 | 15,061 | |||||||||||||||||||||||
Debt discount | 14,939 | 14,939 | |||||||||||||||||||||||
Accrued interest payable | $ 1,011 | $ 1,011 | |||||||||||||||||||||||
Beneficial ownership percentage | 4.99% | 4.99% | |||||||||||||||||||||||
Conversion price | $ 0.02 | ||||||||||||||||||||||||
Chief Financial Officer [Member] | |||||||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||||||
Interest expense | $ 30,000 | ||||||||||||||||||||||||
Carrying value | $ 15,884 | $ 15,884 | |||||||||||||||||||||||
Debt discount | 37,884 | 37,884 | |||||||||||||||||||||||
Accrued interest payable | $ 3,138 | $ 3,138 | |||||||||||||||||||||||
Beneficial ownership percentage | 4.99% | 4.99% | |||||||||||||||||||||||
Maturity date | Dec. 31, 2020 | ||||||||||||||||||||||||
Beneficial Conversion Feature | $ 30,000 | ||||||||||||||||||||||||
Principal | Chief Financial Officer [Member] | |||||||||||||||||||||||||
Conversion of Stock, Shares Converted | 1,500,000 | ||||||||||||||||||||||||
Robert L. Hymers III [Member] | |||||||||||||||||||||||||
Conversion of Stock, Shares Converted | 878,190 | 9,600,000 | |||||||||||||||||||||||
Robert L. Hymers III [Member] | Principal | |||||||||||||||||||||||||
Conversion of Stock, Amount Converted | $ 53,768 | $ 576,000 | |||||||||||||||||||||||
Robert L. Hymers III [Member] | Interest | |||||||||||||||||||||||||
Conversion of Stock, Amount Converted | $ 4,626 | ||||||||||||||||||||||||
Common stock subscription agreements | Lender | |||||||||||||||||||||||||
Proceeds from Convertible debt | $ 329,613 | ||||||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||||||
Interest expense | $ 50,000 | ||||||||||||||||||||||||
Carrying value | 3,288 | $ 3,288 | |||||||||||||||||||||||
Debt discount | 46,712 | 46,712 | |||||||||||||||||||||||
Accrued interest payable | 329 | 329 | |||||||||||||||||||||||
Convertible debt | $ 50,000 | $ 50,000 | $ 50,000 | $ 50,000 | |||||||||||||||||||||
Beneficial ownership percentage | 4.99% | 4.99% | 4.99% | 4.99% | |||||||||||||||||||||
Conversion of Stock, Shares Converted | 3,409,221 | ||||||||||||||||||||||||
Maturity date | Aug. 7, 2021 | ||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investor | |||||||||||||||||||||||||
Principal amount | $ 110,000 | ||||||||||||||||||||||||
Proceeds from Convertible debt | $ 97,500 | ||||||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||||||
Interest expense | $ 110,000 | ||||||||||||||||||||||||
Carrying value | $ 58,828 | $ 58,828 | |||||||||||||||||||||||
Debt discount | 51,172 | 51,172 | |||||||||||||||||||||||
Accrued interest payable | 4,400 | 4,400 | |||||||||||||||||||||||
Conversion price | $ 0.05 | ||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investor 1 | |||||||||||||||||||||||||
Principal amount | $ 115,500 | ||||||||||||||||||||||||
Proceeds from Convertible debt | $ 100,000 | ||||||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||||||
Interest expense | $ 115,500 | ||||||||||||||||||||||||
Carrying value | 101,735 | 101,735 | |||||||||||||||||||||||
Debt discount | 101,735 | 101,735 | |||||||||||||||||||||||
Accrued interest payable | 3,813 | $ 3,813 | |||||||||||||||||||||||
Conversion of Stock, Shares Converted | 583,354 | ||||||||||||||||||||||||
Conversion price | $ 0.10 | ||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investor 1 | Principal | |||||||||||||||||||||||||
Conversion of Stock, Amount Converted | $ 57,750 | ||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investor 1 | Interest | |||||||||||||||||||||||||
Conversion of Stock, Amount Converted | 585 | ||||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investor 2 | |||||||||||||||||||||||||
Principal amount | $ 243,875 | ||||||||||||||||||||||||
Proceeds from Convertible debt | $ 215,500 | ||||||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||||||
Interest expense | $ 243,875 | ||||||||||||||||||||||||
Carrying value | 55,144 | 55,144 | |||||||||||||||||||||||
Debt discount | 160,356 | 160,356 | |||||||||||||||||||||||
Accrued interest payable | 8,352 | 8,352 | |||||||||||||||||||||||
Securities Purchase Agreement [Member] | Accredited Investor 3 | |||||||||||||||||||||||||
Principal amount | 243,875 | ||||||||||||||||||||||||
Proceeds from Convertible debt | $ 215,500 | ||||||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||||||
Interest expense | $ 243,875 | ||||||||||||||||||||||||
Carrying value | 55,144 | 55,144 | |||||||||||||||||||||||
Debt discount | 160,356 | 160,356 | |||||||||||||||||||||||
Accrued interest payable | 6,102 | 6,102 | |||||||||||||||||||||||
Series B Preferred Stock Purchase Agreements [Member] | Accredited Investor 4 | |||||||||||||||||||||||||
Principal amount | 329,500 | 329,500 | |||||||||||||||||||||||
Carrying value | 60,660 | 60,660 | |||||||||||||||||||||||
Debt discount | 268,840 | 268,840 | |||||||||||||||||||||||
Accrued interest payable | 4,852 | 4,852 | |||||||||||||||||||||||
Second Securities Purchase Agreements [Member] | Accredited Investor 5 | |||||||||||||||||||||||||
Principal amount | $ 215,000 | ||||||||||||||||||||||||
Proceeds from Convertible debt | $ 191,000 | ||||||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||||||
Interest expense | $ 215,000 | ||||||||||||||||||||||||
Carrying value | 49,479 | 49,479 | |||||||||||||||||||||||
Debt discount | 165,521 | 165,521 | |||||||||||||||||||||||
Accrued interest payable | 4,948 | 4,948 | |||||||||||||||||||||||
Second Securities Purchase Agreements [Member] | Accredited Investor 6 | |||||||||||||||||||||||||
Principal amount | $ 215,000 | ||||||||||||||||||||||||
Proceeds from Convertible debt | $ 191,000 | ||||||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||||||
Interest expense | $ 215,000 | ||||||||||||||||||||||||
Carrying value | 44,767 | 44,767 | |||||||||||||||||||||||
Debt discount | 170,233 | 170,233 | |||||||||||||||||||||||
Accrued interest payable | 4,477 | 4,477 | |||||||||||||||||||||||
Second Securities Purchase Agreements [Member] | Accredited Investor 7 | |||||||||||||||||||||||||
Principal amount | $ 130,000 | ||||||||||||||||||||||||
Proceeds from Convertible debt | $ 108,000 | ||||||||||||||||||||||||
Interest rate | 8.00% | ||||||||||||||||||||||||
Interest expense | $ 130,000 | ||||||||||||||||||||||||
Carrying value | 3,918 | 3,918 | |||||||||||||||||||||||
Debt discount | 126,082 | 126,082 | |||||||||||||||||||||||
Accrued interest payable | 313 | 313 | |||||||||||||||||||||||
Stock Purchase Agreement | NPE | |||||||||||||||||||||||||
Debt discount | $ 270,886 | $ 270,886 | $ 270,886 | ||||||||||||||||||||||
Convertible debt | $ 440,000 | ||||||||||||||||||||||||
Beneficial ownership percentage | 4.99% | 4.99% | 4.99% | ||||||||||||||||||||||
Initial investment | $ 1,714,903 | $ 1,714,903 | $ 1,714,903 | ||||||||||||||||||||||
Debt default | $ 540,000 | ||||||||||||||||||||||||
Stock Purchase Agreement | NPE | |||||||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||||||
Debt discount | $ 270,886 | ||||||||||||||||||||||||
Initial investment | $ 1,714,903 | ||||||||||||||||||||||||
Stock Issued During Period, Shares, Acquisitions | 266,667 | ||||||||||||||||||||||||
Convertible Promissory Note | |||||||||||||||||||||||||
Principal amount | $ 150,000 | ||||||||||||||||||||||||
Original issue discount | $ 15,000 | ||||||||||||||||||||||||
Warrants exercisable | 468,750 | ||||||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||||||
Interest expense | $ 75,000 | ||||||||||||||||||||||||
Warrant grant term | 3 years | ||||||||||||||||||||||||
Warrant granted price | $ 0.48 | ||||||||||||||||||||||||
Beneficial ownership percentage | 4.99% | ||||||||||||||||||||||||
Convertible Promissory Note | |||||||||||||||||||||||||
Principal amount | $ 78,750 | 256,500 | |||||||||||||||||||||||
Original issue discount | 3,750 | 10,500 | |||||||||||||||||||||||
Legal fees | 11,000 | ||||||||||||||||||||||||
Deferred finance costs | 3,750 | ||||||||||||||||||||||||
Proceeds from Convertible debt | $ 71,250 | $ 235,000 | |||||||||||||||||||||||
Interest rate | 6.00% | 10.00% | |||||||||||||||||||||||
Interest expense | $ 78,750 | $ 256,500 | |||||||||||||||||||||||
Beneficial ownership percentage | 4.99% | ||||||||||||||||||||||||
Maturity date | Jul. 21, 2021 | ||||||||||||||||||||||||
Repayment of convertible debt | 256,500 | ||||||||||||||||||||||||
Repayment of accrued interest | 13,772 | 13,772 | |||||||||||||||||||||||
Repayment interest and penalties | 127,565 | ||||||||||||||||||||||||
Two Convertible Promissory Notes | |||||||||||||||||||||||||
Principal amount | 129,250 | 129,250 | |||||||||||||||||||||||
Original issue discount | 11,750 | 11,750 | |||||||||||||||||||||||
Proceeds from Convertible debt | $ 117,500 | ||||||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||||||
Interest expense | $ 129,250 | ||||||||||||||||||||||||
Carrying value | 8,452 | 8,452 | |||||||||||||||||||||||
Debt discount | 120,798 | 120,798 | |||||||||||||||||||||||
Accrued interest payable | $ 632 | $ 632 | |||||||||||||||||||||||
Beneficial ownership percentage | 4.99% | 4.99% | |||||||||||||||||||||||
Maturity date | May 31, 2021 | ||||||||||||||||||||||||
Three Convertible Promissory Notes | |||||||||||||||||||||||||
Principal amount | 279,500 | 279,500 | |||||||||||||||||||||||
Deferred finance costs | $ 12,500 | 12,500 | |||||||||||||||||||||||
Proceeds from Convertible debt | $ 267,000 | ||||||||||||||||||||||||
Interest rate | 8.00% | ||||||||||||||||||||||||
Interest expense | $ 279,500 | ||||||||||||||||||||||||
Beneficial ownership percentage | 4.99% | 4.99% | |||||||||||||||||||||||
Repayment of convertible debt | $ 279,500 | ||||||||||||||||||||||||
Repayment of accrued interest | $ 11,007 | 11,007 | |||||||||||||||||||||||
Convertible Promissory Note | |||||||||||||||||||||||||
Principal amount | $ 107,000 | ||||||||||||||||||||||||
Original issue discount | 5,000 | ||||||||||||||||||||||||
Deferred finance costs | 2,000 | ||||||||||||||||||||||||
Proceeds from Convertible debt | 100,000 | ||||||||||||||||||||||||
Interest expense | $ 107,000 | ||||||||||||||||||||||||
Beneficial ownership percentage | 4.99% | ||||||||||||||||||||||||
Maturity date | Sep. 30, 2021 | ||||||||||||||||||||||||
Repayment of convertible debt | 107,000 | ||||||||||||||||||||||||
Repayment of accrued interest | $ 5,101 | $ 5,101 | |||||||||||||||||||||||
Two Convertible Promissory Notes | |||||||||||||||||||||||||
Principal amount | $ 133,101 | ||||||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||||||
Interest expense | $ 133,101 | ||||||||||||||||||||||||
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 | ||||||||||||||||||||||||
Convertible Promissory Note | |||||||||||||||||||||||||
Principal amount | $ 20,000 | $ 113,000 | $ 113,000 | ||||||||||||||||||||||
Warrants exercisable | 26,667 | ||||||||||||||||||||||||
Exercisable Price | $ 3.50 | ||||||||||||||||||||||||
Interest rate | 7.00% | ||||||||||||||||||||||||
Interest expense | $ 20,000 | ||||||||||||||||||||||||
Principal balance cancelled | 20,000 | 20,000 | |||||||||||||||||||||||
Accrued interest cancelled | $ 712 | $ 712 | |||||||||||||||||||||||
Beneficial ownership percentage | 4.99% | 4.99% | 4.99% | ||||||||||||||||||||||
Convertible Promissory Note | |||||||||||||||||||||||||
Principal amount | $ 150,000 | ||||||||||||||||||||||||
Original issue discount | $ 15,000 | ||||||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||||||
Interest expense | $ 75,000 | ||||||||||||||||||||||||
Carrying value | $ 62,912 | $ 62,912 | |||||||||||||||||||||||
Debt discount | 37,088 | 37,088 | |||||||||||||||||||||||
Accrued interest payable | 3,431 | 3,431 | |||||||||||||||||||||||
Convertible debt | $ 150,000 | ||||||||||||||||||||||||
Due date | Dec. 20, 2020 | ||||||||||||||||||||||||
Warrant grant term | 3 years | ||||||||||||||||||||||||
Warrant granted price | $ 0.48 | ||||||||||||||||||||||||
Beneficial ownership percentage | 4.99% | ||||||||||||||||||||||||
Convertible Promissory Note | |||||||||||||||||||||||||
Principal amount | $ 78,750 | ||||||||||||||||||||||||
Original issue discount | 3,750 | ||||||||||||||||||||||||
Deferred finance costs | 3,750 | ||||||||||||||||||||||||
Proceeds from Convertible debt | $ 71,250 | ||||||||||||||||||||||||
Interest rate | 6.00% | ||||||||||||||||||||||||
Interest expense | $ 129,250 | ||||||||||||||||||||||||
Carrying value | 8,846 | 8,846 | |||||||||||||||||||||||
Debt discount | 69,904 | 69,904 | |||||||||||||||||||||||
Accrued interest payable | $ 531 | $ 531 | |||||||||||||||||||||||
Beneficial ownership percentage | 4.99% | ||||||||||||||||||||||||
Maturity date | Jul. 21, 2021 |
Derivative Liability and Fair_3
Derivative Liability and Fair Value Measurements (Details) - USD ($) | May 31, 2021 | Aug. 31, 2020 | Aug. 31, 2019 |
Derivative liability | $ 3,585,535 | $ 1,125,803 | $ 0 |
Fair Value, Inputs, Level 1 [Member] | |||
Derivative liability | 0 | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | |||
Derivative liability | 0 | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | |||
Derivative liability | $ 3,385,535 | $ 1,125,803 | $ 0 |
Derivative Liability and Fair_4
Derivative Liability and Fair Value Measurements (Details 1) - USD ($) | 9 Months Ended | 12 Months Ended |
May 31, 2021 | Aug. 31, 2020 | |
Notes to Financial Statements | ||
Balance at beginning | $ 1,125,803 | $ 0 |
Transfers in due to issuance of convertible promissory notes | 6,669,935 | 1,468,704 |
Transfers out due to conversions of convertible promissory notes | (1,490,962) | (449,389) |
Transfers out due to conversions of convertible promissory notes | (231,632) | |
Transfers out due to repayments of convertible promissory notes | (1,721,125) | |
Mark to market | 787,683 | |
Balance at end | 3,585,535 | 1,125,803 |
Loss on change in derivative liability | $ (998,116) | $ 338,120 |
Derivative Liability and Fair_5
Derivative Liability and Fair Value Measurements (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
May 31, 2021 | Aug. 31, 2020 | |
Fair value of embedded derivatives | $ 3,585,535 | $ 1,125,803 |
Dividend yield | 0.00% | 0.00% |
Expected volatility | 318.00% | 385.00% |
Weighted average risk-free interest rate | 0.12% | |
Minimum [Member] | ||
Weighted average risk-free interest rate | 0.01% | |
Expected life (in years) | 3 months 19 days | 6 months |
Maximum [Member] | ||
Weighted average risk-free interest rate | 0.05% | |
Expected life (in years) | 1 year 2 months 30 days | 1 year 4 months 24 days |
Convertible Notes Payable [Member] | ||
Fair value of embedded derivatives | $ 6,669,935 | $ 1,038,111 |
Dividend yield | 0.00% | 0.00% |
Convertible Notes Payable [Member] | Minimum [Member] | ||
Expected volatility | 318.00% | 389.94% |
Weighted average risk-free interest rate | 0.04% | 0.13% |
Expected life (in years) | 9 months | 9 months |
Convertible Notes Payable [Member] | Maximum [Member] | ||
Expected volatility | 378.00% | 398.53% |
Weighted average risk-free interest rate | 0.13% | 1.60% |
Expected life (in years) | 1 year 6 months | 3 years |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | 12 Months Ended |
Aug. 31, 2020USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Finance lease | $ 43,200 |
Lease expiration date | Aug. 14, 2020 |
Common Stock (Details Narrative
Common Stock (Details Narrative) - $ / shares | 1 Months Ended | 9 Months Ended | |||||||
May 20, 2020 | May 31, 2021 | Jul. 12, 2021 | Jun. 17, 2021 | Aug. 31, 2020 | Sep. 30, 2019 | Aug. 31, 2019 | Sep. 25, 2007 | Aug. 22, 2007 | |
Reverse stock split, description | Company affected a reverse split as of September 30, 2019, which had the effect of reducing the number of outstanding shares from 187,864,600 to 12,524,307. | ||||||||
Common stock, shares issued | 78,733,317 | 27,082,419 | 12,524,307 | 1,000,000 | |||||
Common stock, shares outstanding | 78,733,317 | 27,082,419 | 12,524,307 | 12,524,307 | 1,000,000 | ||||
Common stock, par or stated value per share (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.0001 | |||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 290,000,000 | 300,000,000 | |||||
Pinnacle Consulting Services | |||||||||
Shares Issued for Services, Shares | 1,100,000 | ||||||||
Tabular Investments | |||||||||
Shares Issued for Services, Shares | 1,000,000 | ||||||||
Subsequent Event [Member] | |||||||||
Common stock, shares issued | 78,733,317 | ||||||||
Common stock, shares outstanding | 78,733,317 | ||||||||
Common stock, par or stated value per share (in dollars per share) | $ 0.001 | ||||||||
Common stock, shares authorized | 500,000,000 |
Preferred Stock (Details Narrat
Preferred Stock (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | ||||||
Mar. 31, 2021 | May 28, 2020 | Dec. 16, 2019 | Feb. 28, 2021 | May 31, 2021 | Aug. 31, 2020 | Aug. 31, 2019 | Sep. 25, 2007 | |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | |||||
Preferred stock, par or stated value per share | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Preferred stock, shares issued | 6,000,000 | 6,000,000 | 6,000,000 | 0 | ||||
Preferred stock, shares outstanding | 6,000,000 | 6,000,000 | 6,000,000 | 0 | ||||
Series B Preferred Stock [Member] | ||||||||
Preferred stock, shares issued | 670,750 | |||||||
Preferred stock, shares outstanding | 670,750 | |||||||
Proceeds from Issuance of Preferred Stock | $ 225,000 | |||||||
Series B Preferred Stock [Member] | Investor [Member] | ||||||||
Number of shares issued | 153,500 | |||||||
Purchase Price | $ 153,500 | |||||||
Series B Preferred Stock [Member] | Investor One [Member] | ||||||||
Number of shares issued | 78,500 | |||||||
Purchase Price | $ 78,500 | |||||||
Series A Preferred Stock [Member] | ||||||||
Preferred stock, shares authorized | 8,000,000 | |||||||
Preferred stock, voting right | Holders of Series A Preferred Stock shall be entitled to 50 votes for every Share of Series A Preferred Stock | |||||||
Shares returned during the period | 2,000,000 | |||||||
Preferred stock, shares issued | 6,000,000 | 6,000,000 | ||||||
Preferred stock, shares outstanding | 6,000,000 | 6,000,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
May 31, 2021 | May 31, 2020 | Aug. 31, 2020 | Aug. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Expected federal income tax benefit at statutory rate | $ 1,041,213 | $ 81,815 | ||
Nondeductible items | (127,358) | (1,068) | ||
Change in valuation allowance | (913,855) | (80,747) | ||
Income tax benefit | $ 0 | $ 0 | $ 0 | $ 0 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | Aug. 31, 2020 | Aug. 31, 2019 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 1,126,473 | $ 212,618 |
Research and development credit carry forward | 1,963 | 1,963 |
Total deferred tax assets | 1,128,436 | 214,581 |
Less: valuation allowance | (1,128,436) | (214,581) |
Net deferred tax asset | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Aug. 31, 2020 | Aug. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Operating loss carry forwards | $ 5,337,000 | |
Operating Loss Carryforwards, Expiration Date | Aug. 31, 2040 | |
Research and development credit carry forward | $ 1,963 | $ 1,963 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Jun. 11, 2021 | Jun. 09, 2021 | Sep. 02, 2020 | Nov. 06, 2019 | Jun. 16, 2021 | Sep. 30, 2020 | Sep. 24, 2020 | Sep. 22, 2020 | May 31, 2021 | May 31, 2020 | Aug. 31, 2020 | Aug. 31, 2019 | Jul. 16, 2021 | Jun. 17, 2021 | Aug. 22, 2007 |
Proceeds from Convertible debt | $ 1,891,000 | $ 691,269 | $ 673,284 | $ 33,334 | |||||||||||
Common stock, par or stated value per share (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.0001 | |||||||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 290,000,000 | 300,000,000 | |||||||||||
Marijuana Company of America, Inc [Member] | |||||||||||||||
Number of common stock exchanged | 650,000,000 | ||||||||||||||
Convertible Promissory Note | |||||||||||||||
Principal amount | $ 20,000 | $ 113,000 | |||||||||||||
Interest rate | 7.00% | ||||||||||||||
Subsequent Event [Member] | |||||||||||||||
Principal amount | $ 47,009 | ||||||||||||||
Common stock, par or stated value per share (in dollars per share) | $ 0.001 | ||||||||||||||
Common stock, shares authorized | 500,000,000 | ||||||||||||||
Subsequent Event [Member] | Accredited Investor | |||||||||||||||
Proceeds from Convertible debt | $ 135,000 | ||||||||||||||
Interest rate | 8.00% | ||||||||||||||
Maturity date | Jun. 16, 2022 | ||||||||||||||
Subsequent Event [Member] | Robert L. Hymers III [Member] | |||||||||||||||
Interest rate | 10.00% | ||||||||||||||
Conversion price | $ 0.04 | ||||||||||||||
Stock Issued During Period, Shares, Acquisitions | 266,667 | ||||||||||||||
Debt default | $ 540,000 | ||||||||||||||
Convertible debt | $ 440,000 | ||||||||||||||
Subsequent Event [Member] | Marijuana Company of America, Inc [Member] | |||||||||||||||
Value of common shares exchanged | $ 650,000 | ||||||||||||||
Restricted common stock issued | 618,000 | ||||||||||||||
Subsequent Event [Member] | Securities Exchange Agreement [Member] | Marijuana Company of America [Member] | |||||||||||||||
Number of common stock issued | 7,222,222 | ||||||||||||||
Number of common stock exchanged | 650,000,000 | ||||||||||||||
Subsequent Event [Member] | Convertible Promissory Note | |||||||||||||||
Principal amount | $ 107,000 | $ 78,000 | $ 78,000 | ||||||||||||
Original issue discount | 5,000 | $ 5,000 | |||||||||||||
Proceeds from Convertible debt | 100,000 | 100,000 | |||||||||||||
Deferred finance costs | $ 2,000 | $ 2,000 | |||||||||||||
Interest rate | 12.00% | 8.00% | 10.00% | 8.00% | |||||||||||
Maturity date | Jun. 24, 2021 | Sep. 22, 2021 | |||||||||||||
Conversion price | $ 0.06 |