Cover
Cover - shares | 3 Months Ended | |
Nov. 30, 2021 | Jan. 19, 2022 | |
Cover [Abstract] | ||
Entity Registrant Name | GRIDIRON BIONUTRIENTS, INC. | |
Entity Central Index Key | 0001629205 | |
Document Type | 10-Q/A | |
Amendment Flag | true | |
Current Fiscal Year End Date | --08-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Nov. 30, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Entity Common Stock Shares Outstanding | 20,020,239 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes | |
Entity File Number | 000-55852 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 36-4797193 | |
Entity Address Address Line 1 | 6991 East Camelback Rd | |
Entity Address Address Line 2 | Suite D-300 | |
Entity Address City Or Town | Scottsdale | |
Entity Address State Or Province | AZ | |
Entity Address Postal Zip Code | 85251 | |
City Area Code | 800 | |
Local Phone Number | 570-0438 | |
Amendment Description | This Amendment No. 1 is being filed for the sole purpose of including the XBRL reporting requirements in this Form 10-Q/A. |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Nov. 30, 2021 | Aug. 31, 2021 |
Current assets: | ||
Cash | $ 2,933,712 | $ 137,476 |
Inventory | 0 | 17,000 |
Prepaid expenses | 15,450 | 14,000 |
Total current assets | 2,949,162 | 168,476 |
Other assets | ||
Equity investment, net of discount | 0 | 11,132 |
Equipment, net of accumulated depreciation of $-0- and $3,144, respectively | 0 | 598 |
Trademarks | 1,680 | 1,680 |
Intangibles | 81,427,827 | 0 |
Total other assets | 81,429,507 | 13,410 |
Total Assets | 84,378,669 | 181,886 |
Current liabilities: | ||
Accounts payable | 437,041 | 41,874 |
Accrued expenses | 103,298 | 2,056 |
Mioxal liability | 28,500,000 | 0 |
Related party payable | 0 | 64,600 |
Note payable, current portion | 10,000 | 160,000 |
Dividends payable | 275,082 | 138,195 |
Total current liabilities | 29,325,421 | 406,725 |
Long term liabilities: | ||
Mioxal liability | 11,000,000 | 0 |
Total long term liabilities | 11,000,000 | 0 |
Total liabilities | 40,325,421 | 406,725 |
Commitments and contingencies | 0 | 0 |
Stockholders' equity (deficiency): | ||
Common stock, $0.001 par value; 200,000,000 shares authorized; 20,020,239 and 188,616 shares issued and outstanding as of November 30, 2021 and August 31, 2021, respectively | 20,020 | 188 |
Additional paid in capital | 47,375,512 | 2,745,906 |
Accumulated deficit | (3,350,368) | (2,973,628) |
Total stockholders' equity (deficiency) | 44,053,248 | (224,839) |
Total Liabilities and Stockholders' equity | 84,378,669 | 181,886 |
Preferred stock Series A [Member] | ||
Stockholders' equity (deficiency): | ||
Preferred stock value | 0 | 0 |
Preferred stock Series B [Member] | ||
Stockholders' equity (deficiency): | ||
Preferred stock value | $ 8,084 | $ 2,695 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Nov. 30, 2021 | Aug. 31, 2021 |
Other assets | ||
Accumulated depreciation | $ 0 | $ 3,144 |
Stockholders' equity | ||
Common stock, shares par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 20,020,239 | 188,616 |
Common stock, shares outstanding | 20,020,239 | 188,616 |
Preferred stock Series A [Member] | ||
Stockholders' equity | ||
Preferred stock, shares par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 22,305,486 | 22,305,486 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Preferred stock Series B [Member] | ||
Stockholders' equity | ||
Preferred stock, shares par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 528,878,083,542 | 8,083,542 |
Preferred stock, shares issued | 8,083,542 | 2,694,514 |
Preferred stock, shares outstanding | 8,083,542 | 2,694,514 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Nov. 30, 2021 | Nov. 30, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||
Revenue | $ 0 | $ 3,080 |
Cost of Revenue | 0 | 1,421 |
Gross margin | 0 | 1,659 |
Operating expenses: | ||
Advertising | 156 | 210 |
Consulting fees | 138,330 | 15,000 |
General and administrative | 12,464 | 12,003 |
Professional fees | 108,931 | 31,621 |
Salaries | 101,191 | 0 |
Total operating expenses | 361,072 | 58,834 |
Net operating income (loss) | (361,072) | (57,175) |
Other (income) expense: | ||
Interest expense | 5,139 | 36,750 |
Interest income | 0 | (27,724) |
Impairment expense | 17,598 | 0 |
Expenses related to convertible notes payable and preferred warrants: | ||
(Gain) loss on change in fair value of derivative liability | 0 | 92,642 |
Interest accretion | 0 | 80,512 |
Gain on extinguishment of debt | (143,956) | 0 |
Other (income) expense | 0 | (2,087) |
Total Other (income) expense | (121,219) | 180,093 |
Net income (loss) | $ (239,853) | $ (237,268) |
Basic income (loss) per share | $ (0.04) | $ (1.27) |
Weighted average number of common shares outstanding - basic | 5,636,864 | 187,194 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Total | Series A, Preferred Stock | Series B, Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit |
Balance, shares at Aug. 31, 2020 | 8,480,000 | 187,194 | ||||
Balance, amount at Aug. 31, 2020 | $ (2,678,007) | $ 8,480 | $ 0 | $ 187 | $ 1,157,253 | $ (3,843,927) |
Dividends on preferred stock accrued | (12,575) | 0 | 0 | 0 | 0 | (12,575) |
Net loss, period ended November 30, 2020 | (237,268) | $ 0 | 0 | $ 0 | 0 | (237,268) |
Balance, shares at Nov. 30, 2020 | 8,480,000 | 187,194 | ||||
Balance, amount at Nov. 30, 2020 | (2,927,850) | $ 8,480 | $ 0 | $ 187 | 1,157,253 | (4,093,770) |
Balance, shares at Aug. 31, 2021 | 2,694,514 | 188,616 | ||||
Balance, amount at Aug. 31, 2021 | (224,839) | 0 | $ 2,695 | $ 188 | 2,745,906 | (2,973,628) |
Dividends on preferred stock accrued | (136,887) | 0 | 0 | 0 | 0 | (136,887) |
Net loss, period ended November 30, 2020 | (239,853) | 0 | $ 0 | 0 | 0 | (239,853) |
Series B-1 preferred stock purchase agreements, shares | 5,389,028 | |||||
Series B-1 preferred stock purchase agreements, amount | 4,000,000 | 0 | $ 5,389 | $ 0 | 3,994,611 | 0 |
Common Stock issued for asset purchase, shares | 19,831,623 | |||||
Common Stock issued for asset purchase, amount | 40,654,827 | 0 | $ 0 | $ 19,832 | 40,634,995 | 0 |
Balance, shares at Nov. 30, 2021 | 8,083,542 | 20,020,239 | ||||
Balance, amount at Nov. 30, 2021 | $ 44,053,248 | $ 0 | $ 8,084 | $ 20,020 | $ 47,375,512 | $ (3,350,368) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flow (Unaudited) - USD ($) | 3 Months Ended | |
Nov. 30, 2021 | Nov. 30, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (239,853) | $ (237,268) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 0 | 430 |
(Gain) Loss on change in fair value of derivative liability | 0 | 173,154 |
Impairment expense | 17,598 | 0 |
Gain on extinguishment of debt | (143,956) | 0 |
Realized income on investment | 0 | (2,087) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 0 | (3,080) |
Inventory | 0 | 1,000 |
Prepaid expenses | (1,450) | 4,945 |
Notes receivable | 0 | 28,820 |
Accounts payable | (22,745) | 45,529 |
Accrued expenses | 101,242 | 0 |
Related party payable | (64,600) | 226 |
Net cash provided by (used in) operating activities | (353,764) | 11,669 |
Cash flows from investing activities: | ||
Cash paid for asset purchase | (850,000) | 0 |
Net cash used in investing activities | (850,000) | 0 |
Cash flows from financing activities | ||
Proceeds form series B-1 preferred stock purchase agreements | 4,000,000 | 0 |
Net cash provided by financing activities | 4,000,000 | 0 |
Net increase (decrease) in cash | 2,796,236 | 11,669 |
Cash - beginning of the year | 137,476 | 17,881 |
Cash - end of the year | 2,933,712 | 29,550 |
Supplemental disclosures: | ||
Interest paid | 0 | 0 |
Income taxes | 0 | 0 |
Non-cash transactions: | ||
Preferred stock dividends accrued | 136,887 | 12,575 |
Common Stock issued for asset purchase | $ 40,654,827 | $ 0 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 3 Months Ended |
Nov. 30, 2021 | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | |
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Gridiron BioNutrients, Inc. (the “Company” or “Gridiron”) was formed under the laws of the state of Nevada on July 20, 2017 to develop and distribute a retail line of health water infused with probiotics and minerals. The Company is currently developing products using five proprietary preclinical prodrugs: a mushroom-derived psychedelic molecule for treatment post-traumatic stress disorder and depression, a novel cannabinoid for treatment of addiction and three additional novel cannabinoid prodrugs addressing clinical indications of refractory epilepsy, burn wounds and uveitis. The Company also owns a currently approved nutraceutical complex specially designed and formulated to contribute and help maintain normal energy metabolism, improve mood and reduce fatigue for those suffering from fibromyalgia and chronic fatigue syndrome. The Company has elected an August 31 st On December 22, 2020, the Company filed Articles of Amendment to its Articles of Incorporation, as amended, which were effective on January 8, 2021 (the “Effective Date”), which effected a three hundred eight for one (308:1) reverse stock split of its outstanding common stock. Previously, on December 4, 2020 the Company filed a definitive Information Statement on Schedule 14C with the SEC notifying its stockholders that on December 2, 2020, the holders of a majority of its outstanding shares of common stock and the shares Series A Convertible Preferred Stock who were entitled to consent to the action, voting as a single class, executed a written consent in lieu of a special meeting of stockholders approving a reverse stock split of the Company’s outstanding common stock of not less than 300:1 and not more than 310:1, with the Company’s board of directors having the discretion as to when such reverse stock split would be effected (on or prior to December 2, 2021) and the exact ratio of the reverse stock split to be set at a whole number within the above range as determined by the board of directors in its sole discretion. On December 17, 2020, in accordance with such authority, the board of directors fixed the exact ratio of the reverse stock split. Change in Control On November 5, 2021, the Company completed the acquisition of all of the assets, including intellectual property assets, relating to Mioxal® as discussed in Note 4 – Asset Purchase. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Nov. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation This summary of accounting policies for Gridiron is presented to assist in understanding the Company’s financial statements. The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting) and have been consistently applied in the preparation of the financial statements. Reclassifications Certain prior year amounts have been reclassified for comparative purposes to conform to the current-year financial statement presentation. These reclassifications had no effect on previously reported results. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results could differ from those estimates. Estimates are used when accounting for fair value calculations related to embedded conversion features of outstanding convertible notes payable. As discussed on Note 4 – Exchange Agreement Cash For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. The Company had $2,933,712 and $137,476 Note 9 – Stockholders’ Equity. Revenue recognition Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery. Fair Value of Financial Instruments Fair value of certain of the Company’s financial instruments including cash, prepaid expenses, accounts payable, accrued expenses, notes payable, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value investments. Fair value, as defined in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk. Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values. Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of income. As discussed in Note 11 – Derivative Liability, Note 4 – Exchange Agreement Derivative Liabilities The Company generally does not use derivative financial instruments to hedge exposures to cash flow or market risks. However, certain other financial instruments, such as warrants and embedded conversion features on the convertible debt, are classified as derivative liabilities due to protection provisions within the agreements. Convertible notes payable are initially recorded at fair value using the Monte Carlo model and subsequently adjusted to fair value at the close of each reporting period. The preferred stock warrants are initially recorded at fair value using the Black Scholes model and subsequently adjusted to fair value at the close of each reporting period. The Company accounts for derivative instruments and debt instruments in accordance with the interpretive guidance of ASC 815, ASU 2017-11, and associated pronouncements related to the classification and measurement of warrants and instruments with conversion features. Income Taxes Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Use of net operating loss carry forwards for income tax purposes may be limited by Internal Revenue Code section 382 if a change of ownership occurs. Principals of Consolidation The consolidated financial statements represent the results of Gridiron BioNutrients, Inc, its wholly owned subsidiary, Gridiron Ventures and the assets, processes, and results therefrom. All intercompany transactions and balances have been eliminated. All financial information has been prepared in conformity with accounting principles generally accepted in the United States of America. Property and Equipment Property and equipment are carried at cost. Expenditures for maintenance and repairs are expensed in the period incurred. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in income for the period. Depreciation is computed for financial statement purposes on a straight-line basis over estimated useful lives of the related assets and the modified accelerated cost recovery system for federal income tax purposes. The estimated useful lives of depreciable assets are: Estimated Useful Lives Computer and other equipment 3 years Vehicle 5 years The Company’s property and equipment consisted of the following as of November 30, 2021 and August 31, 2021: November 30, 2021 August 31, 2021 Computer Equipment $ -0- $ 1,569 Other -0- 3,587 Accumulated depreciation -0- (4,558 ) Net book value $ -0- $ 598 With the asset acquisition as discussed in Note 3 – Asset Acquisition Inventories Inventories consist of raw materials and T-free distillate and are stated at the lower of cost or net realizable value using the first‑in, first‑out method. The Company periodically assesses the recoverability of its inventory and reduces the carrying value of the inventory when items are determined to be obsolete, defective or in excess of forecasted sales requirements. Inventory write‑downs for excess, defective and obsolete inventory are recorded as impairment expense in the accompanying statement of operations. The Company wrote-off $17,000 and $-0- of obsolete inventory or inventory below market value for the for the three months ended November 30, 2021 and 2020, respectively. A summary of the Company’s inventory as of November 30, 2021 and August 31, 2021 are as follows: Type November 30, 2021 August 31, 2021 Raw Materials $ -0- $ -0- T-free Distillate -0- 17,000 Total Inventory $ -0- $ 17,000 Basic Income (Loss) Per Share Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. The Series B and Series B1 Convertible Preferred shares would convert to 8,083,542 shares of the Company’s common stock in addition to the 20,020,239 outstanding shares at November 30, 2021. The Company calculates diluted earnings per share by dividing the Company’s net income available to common shareholders less preferred dividends by the diluted weighted average number of shares outstanding during the period. The conversion of the Company’s Series B and Series B1 Convertible Preferred shares are excluded from the computation of diluted earnings per share as they are anti-dilutive due to the Company’s operating losses for the three months ended November 30, 2021 and 2020. Dividends During the year ended August 31, 2018, the Company issued Series A Convertible Preferred Stock, which accrues dividends at a rate of 5% annually. As discussed on Note 4 – Exchange Agreement Advertising Costs The Company’s policy regarding advertising is to expense advertising when incurred. The Company incurred advertising costs totaling $156 and $210 during the three months ended November 30, 2021 and 2020, respectively. Stock-Based Compensation The Company accounts for share-based compensation in accordance with the fair value recognition provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 718. The Company issues restricted stock to employees and consultants for their services. Cost for these transactions are measured at the fair value of the equity instruments issued at the date of grant. These shares are considered fully vested and the fair market value is recognized as expense in the period granted. The Company recognized consulting expenses and a corresponding increase to additional paid-in-capital related to stock issued for services. For agreements requiring future services, the consulting expense is to be recognized ratably over the requisite service period. There was $-0- stock-based compensation during three months ended November 30, 2021 and 2020. Related Parties The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the related parties include (a) affiliates of the Company; (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. Recently Issued Accounting Standards In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes In August 2020, the FASB issued ASU 2020-06 , Derivatives and Hedging Derivatives and Hedging—Contracts in Entity’s Own Equity Management believes recently issued accounting pronouncements will have no impact on the financial statements of the Company. Accounts Receivable Accounts receivable balances are established for amounts owed to the Company from its customers from the sale of products. The Company closely monitors the collectability of outstanding accounts receivable and provide an allowance for doubtful accounts based on estimated collections of outstanding amounts. The Company evaluated the accounts receivable and determined no collection loss reserve was necessary. There were $-0- outstanding accounts receivable as of November 30, 2021 and August 31, 2021. Trademark Trademark costs are capitalized as incurred to the extent the Company expects the costs incurred to result in a trademark being awarded. The trademarks are deemed to have an indefinite life and are reviewed for impairment loss considerations annually. As of November 30, 2021 and August 31, 2021, the Company had trademarks totaling $1,680. |
ASSET ACQUISITION
ASSET ACQUISITION | 3 Months Ended |
Nov. 30, 2021 | |
ASSET ACQUISITION | |
NOTE 3 - ASSET ACQUISITION | NOTE 3 – ASSET ACQUISITION On November 5, 2021, the Company completed the acquisition of all of the assets, including intellectual property assets, relating to Mioxal®, a nutraceutical complex composed of essential amino acids, natural coenzymes and minerals, and assumed certain liabilities held by ST BioSciences, Ltd., a company organized under the laws of England and Wales (“STB”). The acquisition was completed pursuant to the terms of the Amended and Restated Asset Purchase Agreement dated November 5, 2021. As consideration for the acquisition, the Company paid $850,000 cash and issued 19,831,623 shares of Common Stock to STB valued at $40,654,827 or $2.05 per share based on the closing market price on November 5, 2021, which at the closing of the acquisition represented approximately 70% of the Company’s outstanding shares of Common Stock on a fully diluted basis for an aggregate of $41,504,827. The shares were issued to a director of the Company and former director of STB who join the Company in December 2021. The Mioxal® asset was acquired by STB from Ingenius Biotech S.L, a Spain corporation (“Ingenius”) on September 10, 2021. Ingenius manages the Mioxal® asset. The Ingenius milestone and stock payments were assumed by the Company in aggregate of $39,500,000 and are recorded in current and long-term liabilities in the accompanying consolidated balance sheets. Upon meeting the milestones, the first installment of $1,500,000 is due on January 15, 2022, the second installment of $1,500,000 on April 15, 2022 and $3,500,000 thereafter for each milestone event for an aggregate of $24,500,000. If the first milestone event does not occur on or before January 15, 2022, then the milestone payment will be forfeited and never owed. The milestone being a signed sales agreement with a third party to distribute Mioxal throughout Europe. In addition, Ingenius will receive three tranches of the Company’s common stock beginning twelve months from execution of agreement with STB on September 10, 2021, as follows: · On September 10, 2022 - $4,000,000 · On September 10, 2023 - $5,000,000 · On September 10, 2024 - $6,000,000 · Total stock to be issued - $15,000,000 In addition, until the $39,500,000 is paid in cash and the Company’s common stock, Ingenius will earn an 8% royalty on all sales generated by Mioxal®. The assets and liabilities assumed has been valuated at the fair values as follows: The Mioxal® asset is under development and will be amortized over the useful life of 24 years in subsequent periods with an annual amortization for $3,385,409. The other intangible assets for $178,000 are under development and will be amortized over the useful life of 21 years in subsequent periods with an annual amortization for $8,476. All intangible assets will be tested for impairment on an annual basis or sooner if deemed necessary. Mioxal® 81,249,827 Other intangible assets 178,000 Less liabilities assumed: Mioxal® liability assumed 39,500,000 Other liabilities assumed 423,000 Net value acquired in asset acquisition 41,504,827 |
EXCHANGE AGREEMENT
EXCHANGE AGREEMENT | 3 Months Ended |
Nov. 30, 2021 | |
EXCHANGE AGREEMENT | |
NOTE 4 - EXCHANGE AGREEMENT | NOTE 4 – EXCHANGE AGREEMENT On April 9, 2021 Company entered into an Exchange Agreement with Calvary Fund Management, LLC (“Calvary”) pursuant to which it agreed to issue Calvary 2,694,514 shares of its newly designated Series B Convertible Preferred Stock (the “Series B Preferred”) in exchange (the “Exchange”) for (i) 8,480,000 shares of its Series A Convertible Preferred Stock (the “Series A Preferred”), (ii) outstanding common stock purchase warrants (the “Warrants”), and (iii) all principal and accrued interest due under outstanding convertible promissory notes (the “Convertible Notes”, and together with the Series A Preferred and the Warrants, the “Calvary Securities”). The closing of the Exchange (the “Closing”) will occur following the satisfaction or waiver of the conditions set forth in the Exchange Agreement. On the Closing date, subject to the terms and conditions of the Exchange Agreement, the Company will issue the Series B Preferred to Calvary in exchange for the Calvary Securities (which will be cancelled and retired) in a transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) in reliance on exemptions provided pursuant to Section 3(a)(9) of the Securities Act. The Series B Preferred Designations designated 2,694,514 shares of the Company’s blank check preferred stock as Series B Preferred Stock. In addition to rights granted to holders of Series B Preferred Stock under the Nevada Revised Statues, each holder will be entitled to the whole number of votes equal to the number of shares of common stock into which such holder’s Series B Preferred Stock would be convertible on the record date for the vote or consent of stockholders and shall otherwise have voting rights and powers equal to the voting rights and powers of the common stock. Once issued, the shares of Series B Preferred Stock are transferrable by the holder in the holder’s sole option without the consent of the Company, subject to compliance with Section 5 of the Securities Act. The Series B Preferred Stock will rank senior to all other classes of the Company’s capital stock and has a stated value of $1.30 per share (the “Stated Value”). Subject only to the liquidation rights of the holders of Series B Preferred Stock that is then currently issued and outstanding, upon the liquidation, dissolution or winding up of the business of the Company, whether voluntary or involuntary, the Series B Preferred Stock is entitled to receive an amount per share equal to the Stated Value and then receive a pro-rata portion of the remaining assets available for distribution to the holders of common stock on an as-converted to common stock basis. From and after the Closing date, cumulative dividends on each share of Series B Preferred Stock will accrue, on a quarterly basis in arrears, at the rate of 10% per annum on the Stated Value, plus all dividends, whether declared or not, on such share of Series B Preferred Stock (the “Additional Amount”) thereon. All accrued dividends on each share of Series B Preferred Stock are to be paid upon conversion of the Series B Preferred Stock for which the applicable dividend is due. At the option of the Company dividends may be paid in cash or shares of common stock. Each holder of Series B Preferred Stock will also be entitled to receive dividends or distributions on each share of Series B Preferred Stock on an “as converted” into common stock basis when and if dividends are declared on the common stock by the Company’s Board of Directors. Dividends may be paid in cash or property, as determined by the Board of Directors. Subject to the beneficial ownership limitations described below, at any time after the Closing date, each share of Series B Preferred Stock will be convertible at the holder’s option into validly issued, fully paid and non-assessable shares of common stock at a conversion rate (the “Conversion Rate”) determined by dividing the Conversion Amount of such share of Series B Preferred Stock by the conversion price, which is (i) $1.30 or (ii) 75% of the price paid per share by investors in any subsequent offering of the Company’s common stock or common stock equivalents, subject to adjustment as provided herein, subject to adjustment as set forth below (the “Conversion Price”). The Conversion Amount is defined as the Stated Value plus the Additional Amount and any accrued and unpaid late charges with respect to such Stated Value and Additional Amount as of such date of determination. In addition, the shares of Series B Preferred Stock will be convertible at the holder’s option at the Conversion Price any time during the period commencing on the date of the occurrence of a Triggering Event (as defined in the Series B Preferred Designations). A holder of Series B Preferred Stock will not be able to convert the shares into shares of common stock to the extent such conversion or exercise would cause the holder, together with its affiliates, to beneficially own a number of shares of common stock which would exceed 4.99% of the Company’s then outstanding shares of our common stock following such exercise or conversion, subject to a waiver by the holder upon 61 days’ prior notice to the Company. The Conversion Price and the number of shares of common stock issuable upon conversion of the Series B Preferred Stock will be subject to pro-rata adjustment for stock splits, dividends and similar corporate events. In addition, if on or after April 9, 2021, the execution date of the Exchange Agreement, the Company issues or sells, or is deemed to have issued or sold, any shares of common stock, excluding certain specified excluded securities for a consideration per share (the “New Issuance Price”) less than a price equal to the Conversion Price in effect immediately prior to such issue or sale or deemed issuance or sale, then, immediately after such dilutive issuance, the Conversion Price then in effect shall be reduced to the New Issuance Price. The Series B Preferred Designations or any provision hereof (other than the beneficial ownership limitation set forth above) may be modified or amended or the provisions hereof waived with the written consent of the Company and either (i) the holders of a majority of the Series B Preferred Stock then currently outstanding, which must include Cavalry as long as Cavalry (or any of its affiliates) owns at least 5% of the Series B Preferred Stock issued pursuant to the Exchange Agreement, or (ii) Cavalry as long as Cavalry (or any of its affiliates) owns at least 5% of the Series B Preferred Stock issued pursuant to the Exchange Agreement. On the date of the exchange, the Company exchanged 2,694,514 shares of the Company’s Series B Preferred Stock for the principal and interest on four convertible notes payable for $1,477,437, dividends payable on the Series A preferred stock of $105,432 and the Series A preferred stock for $1,006,000 for an aggregate of $2,588,869. On May 17, 2019, Calvary acquired 2,107,356 shares of Series A Preferred Stock and 2,107,356 shares of preferred stock warrants from Pinz Capital Special Opportunities Fund LP. |
GOING CONCERN
GOING CONCERN | 3 Months Ended |
Nov. 30, 2021 | |
GOING CONCERN | |
NOTE 5 - GOING CONCERN | NOTE 5 – GOING CONCERN The Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company had limited revenue and a net operating loss of $361,072 for the three months ended November 30, 2021. The Company has working capital deficit of $26,376,259 and an accumulated deficit of $3,350,368 as of November 30, 2021. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The ability of the Company to fully commence its operations is dependent upon, among other things, obtaining additional financing to continue operations, and execution of its business plan. In response to these concerns, management plans to fund operations through additional debt and equity financing. Debt instruments may be convertible or non-convertible and will vary based on the Company’s needs and financing options available at such times. There can be no assurance that management’s plan will be successful. |
NOTES RECEIVABLE
NOTES RECEIVABLE | 3 Months Ended |
Nov. 30, 2021 | |
NOTES RECEIVABLE | |
NOTE 6 - NOTES RECEIVABLE | NOTE 6 – NOTES RECEIVABLE On April 27, 2020, the Company entered into a Participation Agreement, effective April 27, 2020, with Libertas Funding, LLC, a Connecticut Limited Liability Company (“Libertas”), pursuant to which Libertas offered and the Company accepted to participate with Future Receivables in Purchase Agreement(s) with qualifying merchants, specifically QSI Holding Company, a Delaware Corporation (“QSI”). The Company’s participation buy-in amount was $200,000 with a participation purchase of $264,000 that is estimated to result in weekly payments to the Company for a minimum period of nine months or until the full participation purchase amount has been paid. The $200,000 buy-in was recorded as a Note receivable on the accompanying consolidated balance sheets. On September 1, 2020, Libertas renegotiated this agreement, and the Company will receive weekly payments for $4,921 and extended the term to 38 weeks. The previous weekly payment was $6,984. The final payments was received in April 2021, to fully satisfy the notes receivable. In addition, on April 27, 2020, under the Libertas Participation Agreement, the Company received 45,053 Warrants of QSI Holding Company, a private company, (“QSI Warrants”) to purchase common stock priced at $3.111 per share for common stock par value $0.00001 expiring the 7th anniversary after the issue date. Upon issuance, the Company valued the warrants using the Black Scholes model yielding a total value of $58,443. The Company used the following assumptions upon measurement: QSI Holding Company value per common share of $3.4520, a life of 7 years, an exercise price of $3.111, a risk-free rate of 0.56% and volatility of 32%. In addition, the Company recorded a discount of $58,443 and will record income over the 7-year life of the warrants. On November 8, 2021, the Company entered into a Warrant Assignment Agreement to assign the QSI Warrants issued on April 29, 2020 from QSI Holding Company, Inc. (“QSI”), to Calvary Fund 1 LP (“Calvary”). In consideration of the assignment of the Warrant, Calvary forgives the Company from the principal and interest owing under the Calvary $150,000 promissory note dated August 30, 2021. The warrants are recorded as an equity investment in the accompanying consolidated balance sheets for $-0- and $11,132 at November 30, 2021 and August 31, 2021, respectively. The Company recorded other income of $1,583 and $2,087, respectively for the three months ended November 30, 2021 and 2020, respectively, in the accompanying statement of operations. |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Nov. 30, 2021 | |
NOTES PAYABLE | |
NOTE 7 - NOTES PAYABLE | NOTE 7 – NOTES PAYABLE Short-Term Notes Payable On September 14, 2017, the Company issued a $10,000 promissory note to a limited liability company. The loan bears interest at 5% and has a maturity date of September 15, 2018. The unpaid balance including accrued interest was $12,107 and $11,982 at November 30, 2021 and 2020, respectively. The Company is in default with the repayment terms of the note. On August 30, 2021, the Company issued a $150,000 promissory note to an investor. The loan bears interest at 18% and has a maturity date of August 30, 2022. As discussed in Note 6 – Notes Receivable, Convertible Notes Payable As discussed on Note 4 – Exchange Agreement On August 27, 2019, the Company signed a convertible promissory note with an investor. The $30,000 note was issued with an original issue discount of $3,000 and bears interest at 10% per year. The note principal and interest are convertible into shares of common stock at a 25% discount to the lowest traded price of the Company’s common stock during the 10 prior trading days including the day the notice of conversion is received by the Company. The note matured on February 27, 2020. The note has a prepayment penalty of 110% of the principal and interest outstanding if repaid before 180 days from issuance. After February 27, 2020, the payment premium increases to 125% of the principal and interest outstanding and if in default, the payment premium increases to 140% of the principal and interest outstanding. The original issue discount is amortized through the term of the note. On November 25, 2019, the Company signed a convertible promissory note with an investor. The $140,000 note was issued with an original issue discount of $14,000 and bears interest at 10% per year. The note principal and interest are convertible into shares of common stock at a 35% discount to the lowest traded price of the Company’s common stock during the 10 prior trading days including the day the notice of conversion is received by the Company. The note matured on May 25, 2020. The note has a prepayment penalty of 110% of the principal and interest outstanding if repaid before 180 days from issuance. If in default, the payment premium increases to 140% of the principal and interest outstanding. The original issue discount is amortized through the term of the note. On January 27, 2020, the Company signed a convertible promissory note with an investor. The $555,000 note was issued with an original issue discount of $55,500 and bears interest at 10% per year. The note principal and interest are convertible into shares of common stock at a 35% discount to the lowest traded price of the Company’s common stock during the 10 prior trading days including the day the notice of conversion is received by the Company. The note matured on July 27, 2020. The note has a prepayment penalty of 115% of the principal and interest outstanding if repaid more than 30 days after note issuance. If in default, the payment premium increases to 140% of the principal and interest outstanding. The original issue discount is amortized through the term of the note. On April 27, 2020, the Company signed a convertible promissory note with an investor. The $259,615 note was issued with an original issue discount of $57,115 and bears interest at -0-% per year. The Company recorded the self-amortizing convertible promissory note using the effective interest rate method to calculate the loan payable at $202,500 and accrued interest at $57,115. The note requires nine equal payments due starting June 15, 2020 for $28,846. In the event the Company fails to make the $28,846 installment payment by the 15th day of each designated month and/or fails to cure any missed installment payment within five (5) calendars days following the due date, or the Company defaults, the defaulted amount owed shall be 130% of the total outstanding balance owed by the Company. The default interest rate for missing an installment payment shall be 18% and the conversion into common stock shall be at a price of $0.02 per common stock. The note principal and interest are convertible into shares of common stock at the lower of $0.02 per share or a 35% discount to the lowest traded price of the Company’s common stock during the 10 prior trading days including the day the notice of conversion is received by the Company. The note matured on February 21, 2021. The Company made the first payment on June 15, 2020 for $28,846 and a partial payment of $10,000 on July 15, 2020. The original issue discount is amortized through the term of the note. The conversion features meet the definition of a derivative liability instrument because the conversion rate is variable and therefore does not meet the “fixed-for-fixed” criteria outlined in ASC 815-40-15. As a result, the conversion features of the notes are recorded as a derivative liability at fair value and marked-to-market each period with the changes in fair value each period charged or credited to other income (expense). See Note 11 - Derivative Liability At November 30, 2021 and August 31, 2021, the outstanding principal balances of the convertible notes payable was $-0-. The Company recorded interest accretion on the debt discount of $-0- and $80,511 for the three months ended November 30, 2021 and 2020, respectively, and interest expense of $5,139 and $36,750 for the three months ended November 30, 2021 and 2020, respectively, in the accompanying consolidated statements of operations. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Nov. 30, 2021 | |
RELATED PARTY TRANSACTIONS | |
NOTE 8 - RELATED PARTY TRANSACTIONS | NOTE 8 – RELATED PARTY TRANSACTIONS As of November 30, 2021, and August 31, 2021, the Company owed $-0- and $64,600, respectively to our former President and Director. The balance due is recorded as related party payable in the accompanying consolidated balance sheets. |
STOCKHOLDERS EQUITY
STOCKHOLDERS EQUITY | 3 Months Ended |
Nov. 30, 2021 | |
STOCKHOLDERS EQUITY | |
NOTE 9 - STOCKHOLDERS EQUITY | NOTE 9 – STOCKHOLDERS’ EQUITY Preferred Stock There were -0- of Series A Convertible Preferred Stock issued and outstanding as of November 30, 2021 and August 31, 2021. As discussed on Note 4 – Exchange Agreement On September 7, 2021, the Company consummated the initial tranche of its $2 million financing contemplated by that certain Series B-1 Purchase Agreement between the Company and an investor pursuant to which the Company agreed to issue and sell the investor up to 2,694,514 shares of its newly designated Series B-1 Convertible Preferred Stock (the “Series B-1 Preferred”) at a Stated Value per share price of $0.742245 (or $2,000,000 in the aggregate). At the initial closing, the Company issued 673,628 shares of Series B-1 Preferred to the investor and received $500,000 in gross proceeds. On October 28, 2021, the Company consummated the second tranche of the Series B-1 Preferred Stock investment, issuing an additional 673,628 shares of its Series B-1 Preferred Stock to the investor at a price per share of $0.742245 or $500,000.00 in the aggregate. On November 9, 2021, the Company consummated the third and final tranche of the Series B-1 Preferred Stock investment, issuing an additional 1,347,256 shares of its Series B-1 Preferred Stock to the investor a price per share of $0.742245 or $1,000,000.00 in the aggregate. The aggregate gross proceeds of $2,000,000 was used by the Company as working capital. On November 24, 2021, the Company entered into, and consummated the financing contemplated by, that certain Series B-1 Purchase Agreement between the Company and an investor, pursuant to which the Company issued and sold to the investor 2,694,514 shares of its Series B-1 Preferred at a per share price of $0.742245, or $2,000,000. The aggregate gross proceeds of $2,000,000 was used by the Company as working capital. There were 8,083,542 and 2,694,514 shares of Series B and Series B-1 Convertible Preferred Stock issued and outstanding as of November 30, 2021 and August 31, 2021, respectively. Common Stock On January 8, 2021, a 308-to-1 reverse stock split was declared effective. In accordance with the terms of all such instruments, the conversion ratio of the Company’s outstanding Series A Convertible Preferred Stock and its various convertible promissory notes, together with the exercise price of its outstanding warrants, were proportionally adjusted to give effect to the reverse stock split. The Company is authorized to issue up to 200,000,000 shares of $0.001 par value common stock. As discussed in Note 3 – Asset Acquisition, There were 20,020,239 and 188,616 common shares issued and outstanding as of November 30, 2021 and August 31, 2021, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Nov. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
NOTE 10 - COMMITMENTS AND CONTINGENCIES | NOTE 10 – COMMITMENTS AND CONTINGENCIES The Company could become a party to various legal actions arising in the ordinary course of business. Matters that are probable of unfavorable outcomes to the Company and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, the Company’s estimates of the outcomes of such matters and its experience in contesting, litigating and settling similar matters. As of the date of this report, there are no pending legal proceedings to which the Company is a party or of which any of their property is the subject, nor are there any such proceedings known to be contemplated by governmental authorities. In December 2019, a novel strain of COVID-19 was reported in China. Since then, the COVID-19 has spread globally including across North America and the United States. The spread of COVID-19 from China to other countries has resulted in the World Health Organization (WHO) declaring the outbreak of COVID-19 as a “pandemic,” or a worldwide spread of a new disease, on March 11, 2020. Specifically, we caution that our business could be materially and adversely affected by the risks, or the public perception of the risks, related to the outbreak of COVID-19. To date, COVID has directly impacted the ability we have to participate in trade show events and other in-person marketing. The risk of a pandemic, or public perception of the risk, could cause customers to avoid public places, including retail properties, and could cause temporary or long-term disruptions in our supply chains and/or delays in the delivery of our inventory to customers. Further, such risks could also adversely affect retail customers’ financial condition, resulting in reduced spending on premium products. |
DERIVATIVE LIABILITY
DERIVATIVE LIABILITY | 3 Months Ended |
Nov. 30, 2021 | |
DERIVATIVE LIABILITY | |
NOTE 11 - DERIVATIVE LIABILITY | NOTE 11 – DERIVATIVE LIABILITY As discussed on Note 4 – Exchange Agreement Preferred Stock Warrants During the year ended August 31, 2018, the Company issued a total of 27,532 warrants to purchase common stock as part of its preferred stock offering. The warrants are exercisable for a period of three years at $50.82 per share. Additionally, the warrant holder is entitled to a cashless exercise after nine months from issuance in which the holder is entitled to receive a number of shares equal to: [A] the number of outstanding warrant shares under the original issuance multiplied by [B] the greater of the trailing five day volume weighted average price less [A] the number of outstanding warrant shares under the original issuance multiplied by [C] the exercise price of the warrant under the original issuance divided by [D] the lesser of the arithmetic average of the volume weighted average price during the five trailing trading days or the volume weighted average price for the trading day immediately prior to the cashless exercise election. For clarity, the resulting formula is [(A x B) – (A x C)] / D. The Company analyzed the conversion features of the cashless exercise feature in the warrants issued for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded features should be classified as a derivative liability because the exercise price of these warrants are subject to a variable rate. The Company has determined that warrants are not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with ASC 815, the Company has recorded a derivative liability. Upon issuance, the Company valued the derivative using a Black-Scholes model yielding a total value of $674,012 which was expensed during the year ended August 31, 2018. The Company used the following assumptions upon initial measurement: value per common share of $27.72, a remaining life of 3.0 years, an exercise price of $50.82, a risk-free rate of 2.77% and volatility of 195%. As discussed on Note 4 – Exchange Agreement Convertible Notes Payable As discussed in Note 7 – Notes Payable On August 27, 2019, the Company signed a $30,000 convertible promissory note with an investor. The note principal and interest are convertible into shares of common stock at a 25% discount to the lowest traded price of the Company’s common stock during the 10 prior trading days including the day the notice of conversion is received by the Company. The Company analyzed the conversion feature and determined it meets the definition of a derivative liability instrument because the conversion rate is variable and therefore does not meet the “fixed-for-fixed” criteria outlined in ASC 815-40-15. As a result, the conversion features of the notes are recorded as a derivative liability at fair value and marked-to-market each period with the changes in fair value each period charged or credited to other income (expense). Upon issuance, the Company valued the derivative using a Monte Carlo simulation model yielding a total value of $50,277 which was recorded as a derivative liability during the year ended August 31, 2019. The Company used the following assumptions upon initial measurement: value per common share of $2.74, a remaining life of 6 months, an exercise price of $1.30, a risk-free rate of 1.98% and volatility of 287%. In addition, the Company calculated the derivative discount as the difference between the conversion price and the fair market value of the Company’s common stock on the date of issuance. The Company recorded an original issue discount of $3,000 and a derivative discount of $27,000 which aggregated a total discount of $30,000 and was recorded as a discount in the accompanying consolidated balance sheet. On the date of issuance, a net loss of $23,277 was recorded in the accompanying statement of operations. On November 25, 2019, the Company signed a $140,000 convertible promissory note with an investor. The note principal and interest are convertible into shares of common stock at a 35% discount to the lowest traded price of the Company’s common stock during the 10 prior trading days including the day the notice of conversion is received by the Company. The Company analyzed the conversion feature and determined it meets the definition of a derivative liability instrument because the conversion rate is variable and therefore does not meet the “fixed-for-fixed” criteria outlined in ASC 815-40-15. As a result, the conversion features of the notes are recorded as a derivative liability at fair value and marked-to-market each period with the changes in fair value each period charged or credited to other income (expense). Upon issuance, the Company valued the derivative using a Monte Carlo simulation model yielding a total value of $172,608 which was recorded as a derivative liability during the three months ended November 30, 2019. The Company used the following assumptions upon initial measurement: value per common share of $1.54, a remaining life of 6 months, an exercise price of $0.93, a risk-free rate of 1.61% and volatility of 275%. In addition, the Company calculated the derivative discount as the difference between the conversion price and the fair market value of the Company’s common stock on the date of issuance. The Company recorded an original issue discount of $14,000 and a derivative discount of $126,000 which aggregated a total discount of $140,000 and was recorded as a discount in the accompanying consolidated balance sheet. On the date of issuance, a net loss of $46,608 was recorded in the accompanying statement of operations. On January 27, 2020, the Company signed a $555,000 convertible promissory note with an investor. The note principal and interest are convertible into shares of common stock at a 35% discount to the lowest traded price of the Company’s common stock during the 10 prior trading days including the day the notice of conversion is received by the Company. The Company analyzed the conversion feature and determined it meets the definition of a derivative liability instrument because the conversion rate is variable and therefore does not meet the “fixed-for-fixed” criteria outlined in ASC 815-40-15. As a result, the conversion features of the notes are recorded as a derivative liability at fair value and marked-to-market each period with the changes in fair value each period charged or credited to other income (expense). Upon issuance, the Company valued the derivative using a Monte Carlo simulation model yielding a total value of $929,300 which was recorded as a derivative liability during the three months ended February 29, 2020. The Company used the following assumptions upon initial measurement: value per common share of $6.65, a remaining life of 6 months, an exercise price of $3.13, a risk-free rate of 1.57% and volatility of 281%. In addition, the Company calculated the derivative discount as the difference between the conversion price and the fair market value of the Company’s common stock on the date of issuance. The Company recorded an original issue discount of $55,500 and a derivative discount of $499,500 which aggregated a total discount of $555,000 and was recorded as a discount in the accompanying consolidated balance sheet. On the date of issuance, a net loss of $429,800 was recorded in the accompanying statement of operations. On April 27, 2020, the Company signed a $259,615 convertible promissory note with an investor. The note principal and interest are convertible into shares of common stock at $0.02 per share or a 35% discount to the lowest traded price of the Company’s common stock during the 10 prior trading days including the day the notice of conversion is received by the Company. The Company analyzed the conversion feature and determined it meets the definition of a derivative liability instrument because the conversion rate is variable and therefore does not meet the “fixed-for-fixed” criteria outlined in ASC 815-40-15. As a result, the conversion features of the notes are recorded as a derivative liability at fair value and marked-to-market each period with the changes in fair value each period charged or credited to other income (expense). Upon issuance, the Company valued the derivative using a Monte Carlo simulation model yielding a total value of $587,772 which was recorded as a derivative liability during the three months ended May 31, 2020. The Company used the following assumptions upon initial measurement: value per common share of $3.17, a remaining life of 9 months, an exercise price of $1.28, a risk-free rate of 0.17% and volatility of 304%. In addition, the Company calculated the derivative discount as the difference between the conversion price and the fair market value of the Company’s common stock on the date of issuance. The Company recorded an original issue discount of $57,115 and a derivative discount of $202,500 which aggregated a total discount of $259,615 and was recorded as a discount in the accompanying consolidated balance sheet. On the date of issuance, a net loss of $385,272 was recorded in the accompanying statement of operations. Derivative Liability Summary As of November 30, 2021 and August 31, 2021, the Company had no derivative liability in the accompanying consolidated balance sheet, and (gain) loss on change in fair value of the derivative liability of $-0- and $92,642 for the three months ended November 30, 2021 and 2020, respectively, in the accompanying consolidated statement of operations. In addition, the Company amortized $-0- and $80,512 to interest accretion during the three months ended November 30, 2021 and 2020, respectively, in the accompanying consolidated statement of operations for the preferred stock warrants and derivative convertible notes payable. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Nov. 30, 2021 | |
SUBSEQUENT EVENTS | |
NOTE 12 - SUBSEQUENT EVENTS | NOTE 12 – SUBSEQUENT EVENTS On January 1, 2022, Timothy S. Orr resigned as Interim Chief Financial Officer effective as of January 14, 2022. Mr. Orr is resigning to pursue other business opportunities. Mr. Orr will remain a member of the Company’s board of directors. Mr. Jeffery Kraws, the Company’s president, was appointed the Company’s acting CFO. On January 17, 2022, Neil Reithinger was appointed the Company’s CFO. On December 21, 2021, the Board unanimously approved (i) an amendment to the Company’s Certificate of Incorporation to change its corporate name to “Innovation1 Biotech, Inc.” and (ii) to change the ticker symbol of the Company’s common stock to “INVB” or a similar ticker symbol as approved by the Financial Industry Regulatory Authority (“FINRA”). On January 13, 2022, the Company entered into an Amendment No. 1 to Purchase Agreement with Ingenius Biotech S.L. to modify the terms of the Amended and Restated Asset Purchase Agreement dated November 5, 2021 as discussed in Note 3 – Asset Acquisition a) Section 3.2(a) of the Purchase Agreement is hereby deleted in its entirety and replaced with the following: “(b) One hundred fifty thousand U.S. dollars ($150,000) at Closing (the “Closing Consideration”)”. b) Section 3.2(b) of the Purchase Agreement is hereby amended by deleting the phrase “to September 24th, 2021” and replacing it with “by December 31, 2021”. c) Section 3.2(c) of the Purchase Agreement is hereby deleted in its entirety and replaced with the following: “(c) one million five hundred thousand U.S. dollars ($1,500,000) on June 30, 2022.”; and d) Section 3.2(d) of the Purchase Agreement is hereby deleted in its entirety and replaced with the following: “(d) one million five hundred thousand U.S. dollars ($1,500,000) on December 31, 2022. The Company has evaluated all other events occurring subsequently to these financial statements through January 19, 2022 and determined there were no other items to disclose. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Nov. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation | This summary of accounting policies for Gridiron is presented to assist in understanding the Company’s financial statements. The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting) and have been consistently applied in the preparation of the financial statements. |
Reclassifications | Certain prior year amounts have been reclassified for comparative purposes to conform to the current-year financial statement presentation. These reclassifications had no effect on previously reported results. |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results could differ from those estimates. Estimates are used when accounting for fair value calculations related to embedded conversion features of outstanding convertible notes payable. As discussed on Note 4 – Exchange Agreement |
Cash | For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. The Company had $2,933,712 and $137,476 Note 9 – Stockholders’ Equity. |
Revenue Recognition | Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery. |
Fair Value of Financial Instruments | Fair value of certain of the Company’s financial instruments including cash, prepaid expenses, accounts payable, accrued expenses, notes payable, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value investments. Fair value, as defined in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk. Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values. Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of income. As discussed in Note 11 – Derivative Liability, Note 4 – Exchange Agreement |
Derivative Liabilities | The Company generally does not use derivative financial instruments to hedge exposures to cash flow or market risks. However, certain other financial instruments, such as warrants and embedded conversion features on the convertible debt, are classified as derivative liabilities due to protection provisions within the agreements. Convertible notes payable are initially recorded at fair value using the Monte Carlo model and subsequently adjusted to fair value at the close of each reporting period. The preferred stock warrants are initially recorded at fair value using the Black Scholes model and subsequently adjusted to fair value at the close of each reporting period. The Company accounts for derivative instruments and debt instruments in accordance with the interpretive guidance of ASC 815, ASU 2017-11, and associated pronouncements related to the classification and measurement of warrants and instruments with conversion features. |
Income Taxes | Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Use of net operating loss carry forwards for income tax purposes may be limited by Internal Revenue Code section 382 if a change of ownership occurs. |
Principals of Consolidation | The consolidated financial statements represent the results of Gridiron BioNutrients, Inc, its wholly owned subsidiary, Gridiron Ventures and the assets, processes, and results therefrom. All intercompany transactions and balances have been eliminated. All financial information has been prepared in conformity with accounting principles generally accepted in the United States of America. |
Property and Equipment | Property and equipment are carried at cost. Expenditures for maintenance and repairs are expensed in the period incurred. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in income for the period. Depreciation is computed for financial statement purposes on a straight-line basis over estimated useful lives of the related assets and the modified accelerated cost recovery system for federal income tax purposes. The estimated useful lives of depreciable assets are: Estimated Useful Lives Computer and other equipment 3 years Vehicle 5 years The Company’s property and equipment consisted of the following as of November 30, 2021 and August 31, 2021: November 30, 2021 August 31, 2021 Computer Equipment $ -0- $ 1,569 Other -0- 3,587 Accumulated depreciation -0- (4,558 ) Net book value $ -0- $ 598 With the asset acquisition as discussed in Note 3 – Asset Acquisition |
Inventories | Inventories consist of raw materials and T-free distillate and are stated at the lower of cost or net realizable value using the first‑in, first‑out method. The Company periodically assesses the recoverability of its inventory and reduces the carrying value of the inventory when items are determined to be obsolete, defective or in excess of forecasted sales requirements. Inventory write‑downs for excess, defective and obsolete inventory are recorded as impairment expense in the accompanying statement of operations. The Company wrote-off $17,000 and $-0- of obsolete inventory or inventory below market value for the for the three months ended November 30, 2021 and 2020, respectively. A summary of the Company’s inventory as of November 30, 2021 and August 31, 2021 are as follows: Type November 30, 2021 August 31, 2021 Raw Materials $ -0- $ -0- T-free Distillate -0- 17,000 Total Inventory $ -0- $ 17,000 |
Basic Income (Loss) Per Share | Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. The Series B and Series B1 Convertible Preferred shares would convert to 8,083,542 shares of the Company’s common stock in addition to the 20,020,239 outstanding shares at November 30, 2021. The Company calculates diluted earnings per share by dividing the Company’s net income available to common shareholders less preferred dividends by the diluted weighted average number of shares outstanding during the period. The conversion of the Company’s Series B and Series B1 Convertible Preferred shares are excluded from the computation of diluted earnings per share as they are anti-dilutive due to the Company’s operating losses for the three months ended November 30, 2021 and 2020. |
Dividends | During the year ended August 31, 2018, the Company issued Series A Convertible Preferred Stock, which accrues dividends at a rate of 5% annually. As discussed on Note 4 – Exchange Agreement |
Advertising Costs | The Company’s policy regarding advertising is to expense advertising when incurred. The Company incurred advertising costs totaling $156 and $210 during the three months ended November 30, 2021 and 2020, respectively. |
Stock-Based Compensation | The Company accounts for share-based compensation in accordance with the fair value recognition provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 718. The Company issues restricted stock to employees and consultants for their services. Cost for these transactions are measured at the fair value of the equity instruments issued at the date of grant. These shares are considered fully vested and the fair market value is recognized as expense in the period granted. The Company recognized consulting expenses and a corresponding increase to additional paid-in-capital related to stock issued for services. For agreements requiring future services, the consulting expense is to be recognized ratably over the requisite service period. There was $-0- stock-based compensation during three months ended November 30, 2021 and 2020. |
Related Parties | The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the related parties include (a) affiliates of the Company; (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. |
Recently Issued Accounting Standards | In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes In August 2020, the FASB issued ASU 2020-06 , Derivatives and Hedging Derivatives and Hedging—Contracts in Entity’s Own Equity Management believes recently issued accounting pronouncements will have no impact on the financial statements of the Company. |
Accounts Receivable | Accounts receivable balances are established for amounts owed to the Company from its customers from the sale of products. The Company closely monitors the collectability of outstanding accounts receivable and provide an allowance for doubtful accounts based on estimated collections of outstanding amounts. The Company evaluated the accounts receivable and determined no collection loss reserve was necessary. There were $-0- outstanding accounts receivable as of November 30, 2021 and August 31, 2021. |
Trademark | Trademark costs are capitalized as incurred to the extent the Company expects the costs incurred to result in a trademark being awarded. The trademarks are deemed to have an indefinite life and are reviewed for impairment loss considerations annually. As of November 30, 2021 and August 31, 2021, the Company had trademarks totaling $1,680. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Nov. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of Property, Plant and Equipment, estimated useful lives | Estimated Useful Lives Computer and other equipment 3 years Vehicle 5 years |
Schedule of Property, Plant and Equipment | November 30, 2021 August 31, 2021 Computer Equipment $ -0- $ 1,569 Other -0- 3,587 Accumulated depreciation -0- (4,558 ) Net book value $ -0- $ 598 |
Schedule of inventories | Type November 30, 2021 August 31, 2021 Raw Materials $ -0- $ -0- T-free Distillate -0- 17,000 Total Inventory $ -0- $ 17,000 |
ASSET ACQUISITION (Tables)
ASSET ACQUISITION (Tables) | 3 Months Ended |
Nov. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of the assets and liabilities fair value | Mioxal® 81,249,827 Other intangible assets 178,000 Less liabilities assumed: Mioxal® liability assumed 39,500,000 Other liabilities assumed 423,000 Net value acquired in asset acquisition 41,504,827 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 3 Months Ended |
Nov. 30, 2021 | |
Computer and other equipment [Member] | |
Property and equipment, estimated useful life | 3 years |
Vehicles [Member] | |
Property and equipment, estimated useful life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | Nov. 30, 2021 | Aug. 31, 2021 |
Net book value | $ 0 | $ 598 |
Accumulated depreciation | 0 | (4,558) |
Computer Equipment [Member] | ||
Property and equipment | 0 | 1,569 |
Other [Member] | ||
Property and equipment | $ 0 | $ 3,587 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) | Nov. 30, 2021 | Aug. 31, 2021 |
Inventory | $ 0 | $ 17,000 |
T-Free Distillate [Member] | ||
Inventory | 0 | 17,000 |
Raw Materials [Member] | ||
Inventory | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Nov. 30, 2021 | Nov. 30, 2020 | Aug. 31, 2018 | Aug. 31, 2021 | Aug. 31, 2020 | |
Cash | $ 2,933,712 | $ 29,550 | $ 137,476 | $ 17,881 | |
Obsolete Inventory, written off | $ 17,000 | 0 | |||
Series B-1 stock subscriptions | 2,976,236 | ||||
Depreciation | $ 0 | 430 | |||
Dividends payable | 275,082 | 138,195 | |||
Advertising costs | 156 | 210 | |||
Stock based compensation | $ 0 | $ 0 | |||
Common stock shares outstanding | 20,020,239 | ||||
Outstanding accounts receivable | $ 0 | 0 | |||
Trademarks | $ 1,680 | $ 1,680 | |||
Preferred stock Series A [Member] | |||||
Dividend rate, percentage | 5.00% | ||||
Preferred stock Series B [Member] | |||||
Common stock issued upon conversion of preferred stock | 8,083,542 | ||||
Dividend rate, percentage | 10.00% |
ASSET ACQUISITION (Details)
ASSET ACQUISITION (Details) | Nov. 05, 2021USD ($) |
ASSET ACQUISITION | |
Mioxal? | $ 81,249,827 |
Other intangible assets | 178,000 |
Less liabilities assumed | |
Mioxal? liability assumed | 39,500,000 |
Other liabilities assumed | 423,000 |
Net value acquired in asset acquisition | $ 41,504,827 |
ASSET ACQUISITION (Details Narr
ASSET ACQUISITION (Details Narrative) - USD ($) | Nov. 05, 2021 | Nov. 30, 2021 | Aug. 31, 2021 |
Amount received | $ 15,000,000 | ||
Intangible assets | $ 178,000 | ||
Useful life asset | 21 years | ||
Amortization | $ 8,476 | ||
Common stock value per share | $ 0.001 | $ 0.001 | |
Common stock value | $ 20,020 | $ 188 | |
Common stock shares issued | 20,020,239 | 188,616 | |
Mioxal [Member] | |||
Useful life asset | 24 years | ||
Amortization | $ 3,385,409 | ||
S T Bio Sciences Ltd | |||
Common stock value per share | $ 2.05 | ||
Cash consideration paid | $ 850,000 | ||
Common stock value | 40,654,827 | ||
Common Stock fully diluted aggregate fair value | $ 41,504,827 | ||
Common stock shares issued | 19,831,623 | ||
S T Bio Sciences Ltd | Tranche One [Member] | |||
Amount received | $ 4,000,000 | ||
S T Bio Sciences Ltd | Tranche Two [Member] | |||
Amount received | 5,000,000 | ||
S T Bio Sciences Ltd | September 10, 2024 [Member] | Tranche Three [Member] | |||
Amount received | 6,000,000 | ||
Ingenius Biotech [Member] | |||
Current and long-term liabilities | 39,500,000 | ||
Ingenius Biotech [Member] | January 15, 2022 [Member] | |||
Asset acquisition first installment | 1,500,000 | ||
Asset acquisition thereafter | 3,500,000 | ||
Asset acquisition aggregate amount | 24,500,000 | ||
Ingenius Biotech [Member] | April 15, 2022 [Member] | |||
Asset acquisition second installment | $ 1,500,000 |
EXCHANGE AGREEMENT (Details Nar
EXCHANGE AGREEMENT (Details Narrative) - USD ($) | Apr. 09, 2021 | May 17, 2019 | Nov. 30, 2021 | Aug. 31, 2021 | Aug. 31, 2020 |
Dividend payable, total | $ 2,588,869 | $ 275,082 | $ 138,195 | $ 73,995 | |
Calvary Fund Management, LLC [Member] | |||||
Description of shares exchange agreement | it agreed to issue Calvary 2,694,514 shares of its newly designated Series B Convertible Preferred Stock (the “Series B Preferred”) in exchange (the “Exchange”) for (i) 8,480,000 shares of its Series A Convertible Preferred Stock (the “Series A Preferred”), (ii) outstanding common stock purchase warrants (the “Warrants”), and (iii) all principal and accrued interest due under outstanding convertible promissory notes (the “Convertible Notes”, and together with the Series A Preferred and the Warrants, the “Calvary Securities”). | ||||
Interest on notes payable | $ 1,477,437 | ||||
Total Designated Shares | 2,694,514 | ||||
Series A Convertible Preferred Shares [Member] | |||||
Dividend payable, total | $ 105,432 | ||||
Preferred stock aggregate value | $ 1,006,000 | ||||
Series A Convertible Preferred Shares [Member] | Pinz Capital Special Opportunities Fund LP [Member] | |||||
Preferred stock acquired | 2,107,356 | ||||
Acqusition of preferred stock warrant | 2,107,356 | ||||
Series B Convertible Preferred Stock [Member] | Calvary Fund Management, LLC [Member] | |||||
Preffered stock, Ownership percentage | 5.00% | ||||
Series B Convertible Preferred Shares [Member] | |||||
Total Designated Shares | 2,694,514 | ||||
Stated value per share | $ 1.30 | ||||
Rate of interest | 10.00% | ||||
Debt instrument conversion price description | conversion price, which is (i) $1.30 or (ii) 75% of the price paid per share by investors in any subsequent offering of the Company’s common stock or common stock equivalents, subject to adjustment as provided herein, subject to adjustment as set forth below (the “Conversion Price”). | ||||
Percentage of stock converted | 4.99% |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | ||
Nov. 30, 2021 | Nov. 30, 2020 | Aug. 31, 2021 | |
GOING CONCERN | |||
Accumulated deficit | $ (3,350,368) | $ (2,973,628) | |
Working capital deficit | (26,376,259) | ||
Net operating income (loss) | $ (361,072) | $ (57,175) |
NOTES RECEIVABLE (Details Narra
NOTES RECEIVABLE (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Apr. 27, 2020 | Nov. 30, 2021 | Nov. 30, 2020 | Aug. 31, 2021 | |
Equity investment, net of discount | $ 0 | $ 11,132 | ||
Other income | $ 1,583 | $ 2,087 | ||
Promissory note | $ 150,000 | |||
Common stock par value | $ 0.001 | $ 0.001 | ||
Libertas Participation Agreement [Member] | QSI Holding Company [Member] | ||||
Common stock issuable upon exercise of warrants | 45,053 | |||
Purchase Common Stock price per share | $ 3.111 | |||
Common stock issuable upon exercise of warrants, value | $ 58,443 | |||
Exercise price | $ 3.111 | |||
Risk-free rate | 0.56% | |||
Volatility | 32.00% | |||
Common stock par value | $ 0.00001 | |||
Warranty life in years | 7 years | |||
Debt/stock based issue costs | $ 58,443 | |||
Value per common share | $ 3.4520 | |||
Participation Agreement [Member] | Libertas Funding, LLC [Member] | Connecticut Limited Liability Company [Member] | ||||
Participation buy-in, amount | $ 200,000 | |||
Participation purchase, amount | $ 264,000 | |||
Note receivable | $ 200,000 | |||
Participation purchase, unpaid balance | 0 | |||
September 1, 2020 [Member] | ||||
Previous negotiated weekly payment | 6,984 | |||
Renegotiated weekly payment receivables | $ 4,921 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | Sep. 14, 2017 | Jun. 15, 2020 | Apr. 27, 2020 | Jan. 27, 2020 | Nov. 25, 2019 | Aug. 27, 2019 | Nov. 30, 2021 | Nov. 30, 2020 | Aug. 31, 2021 | Aug. 31, 2019 |
Debt instrument, interest payable | $ 0 | $ 80,511 | $ 80,512 | |||||||
Note payable, convertible net of discount | 0 | 831,170 | ||||||||
Interest expenses | $ 5,139 | 36,750 | ||||||||
Convertible notes payable | $ 30,000 | |||||||||
Short-Term Notes Payable 1 [Member] | ||||||||||
Debt instrument, maturity date | Aug. 30, 2022 | |||||||||
Unpaid accrued interest | $ 0 | $ 150,074 | ||||||||
Promisory notes payable | $ 150,000 | |||||||||
Notes payable, interest rate | 18.00% | |||||||||
Short-Term Debts [Member] | ||||||||||
Debt instrument, maturity date | Sep. 15, 2018 | |||||||||
Promisory notes payable | $ 10,000 | |||||||||
Notes payable, interest rate | 5.00% | |||||||||
Accrued interest | $ 12,107 | 11,982 | ||||||||
Convertible Promissory Notes 4 [Member] | ||||||||||
Convertible notes payable | $ 140,000 | |||||||||
Debt instrument, discount | $ 14,000 | |||||||||
Notes payable description | If in default, the payment premium increases to 140% of the principal and interest outstanding. | |||||||||
Debt instrument, interest rate, percentage | 10.00% | |||||||||
Debt instrument, payment, description | The note has a prepayment penalty of 110% of the principal and interest outstanding if repaid before 180 days from issuance | |||||||||
Debt Instrument, notice period, Description | Company’s common stock during the 10 prior trading days including the day the notice of conversion is received by the Company | |||||||||
Debt instrument, conversion rate, percentage | 35.00% | |||||||||
Convertible Promissory Note [Member] | Investor [Member] | ||||||||||
Convertible notes payable | $ 259,615 | $ 555,000 | ||||||||
Debt instrument, payment, description | The note requires nine equal payments due starting June 15, 2020 for $28,846. In the event the Company fails to make the $28,846 installment payment by the 15th day of each designated month and/or fails to cure any missed installment payment within five (5) calendars days following the due date, or the Company defaults, the defaulted amount owed shall be 130% of the total outstanding balance owed by the Company | The note has a prepayment penalty of 115% of the principal and interest outstanding if repaid more than 30 days after note issuance. If in default, the payment premium increases to 140% of the principal and interest outstanding | ||||||||
Debt dafault condition, description | The default interest rate for missing an installment payment shall be 18% and the conversion into common stock shall be at a price of $0.02 per common stock | |||||||||
Loan payable | $ 202,500 | |||||||||
Accrued interest | 57,115 | |||||||||
Debt instrument, discount | $ 57,115 | $ 55,500 | ||||||||
Debt instrument, interest rate, percentage | 0.00% | 10.00% | ||||||||
Installment payment | $ 28,846 | |||||||||
Conversion description | The note principal and interest are convertible into shares of common stock at the lower of $0.02 per share or a 35% discount to the lowest traded price of the Company’s common stock during the 10 prior trading days | |||||||||
Debt instrument, maturity date | Feb. 21, 2021 | |||||||||
Unpaid principle balance | 0 | $ 287,665 | ||||||||
Convertible Promissory Note 1 [Member] | ||||||||||
Convertible notes payable | 30,000 | |||||||||
Debt instrument, discount | $ 3,000 | |||||||||
Notes payable description | After February 27, 2020, the payment premium increases to 125% of the principal and interest outstanding and if in default, the payment premium increases to 140% of the principal and interest outstanding | |||||||||
Debt instrument, interest rate, percentage | 10.00% | |||||||||
Debt instrument, payment, description | The note has a prepayment penalty of 110% of the principal and interest outstanding if repaid before 180 days from issuance | |||||||||
Debt Instrument, notice period, Description | Company’s common stock during the 10 prior trading days including the day the notice of conversion is received by the Company | |||||||||
Debt instrument, conversion rate, percentage | 25.00% | |||||||||
Debt instrument, discount | $ 27,000 | |||||||||
Installment payment | $ 28,846 | |||||||||
Debt instrument, maturity date | Feb. 27, 2020 | |||||||||
Unpaid accrued interest | $ 0 | |||||||||
Partial payment | $ 10,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Nov. 30, 2021 | Aug. 31, 2021 |
Due to related party | $ 0 | $ 64,600 |
President And Director [Member] | ||
Due to related party | $ 0 | $ 64,600 |
STOCKHOLDERS EQUITY (Details Na
STOCKHOLDERS EQUITY (Details Narrative) - USD ($) | Nov. 24, 2021 | Nov. 09, 2021 | Nov. 05, 2021 | Oct. 28, 2021 | Sep. 07, 2021 | Nov. 30, 2021 | Nov. 30, 2020 | Aug. 31, 2021 |
Common stock, par value | $ 0.001 | $ 0.001 | ||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | ||||||
Common stock, shares issued | 20,020,239 | 188,616 | ||||||
Common stock, shares outstanding | 20,020,239 | 188,616 | ||||||
Aggregate gross proceeds | $ 0 | $ 1,659 | ||||||
Series B-1, Convertible Preferred Stock | Tranche One [Member] | ||||||||
Common stock, par value | $ 0.742245 | |||||||
Share issued | 673,628 | |||||||
Gross proceeds | $ 500,000 | |||||||
Series B-1, Convertible Preferred Stock | Initial Tranche [Member] | ||||||||
Share issued | 2,694,514 | |||||||
Gross proceeds | $ 2,000,000 | |||||||
Series B-1, Convertible Preferred Stock | Tranche Two [Member] | ||||||||
Common stock, par value | $ 0.742245 | |||||||
Share issued | 673,628 | |||||||
Gross proceeds | $ 500,000 | |||||||
Series B-1, Preferred Stock | Tranche Three [Member] | ||||||||
Common stock, par value | $ 0.742245 | |||||||
Share issued | 1,347,256 | |||||||
Gross proceeds | $ 1,000,000 | |||||||
Aggregate gross proceeds | $ 2,000,000 | |||||||
Convertible Preferred Stock A [Member] | ||||||||
Preferred stock, shares issued | 0 | 8,480,000 | ||||||
Preferred stock, shares outstanding | 0 | 8,480,000 | ||||||
Convertible Preferred Stock B [Member] | ||||||||
Preferred stock, shares issued | 8,083,542 | 2,694,514 | ||||||
Preferred stock, shares outstanding | 8,083,542 | 2,694,514 | ||||||
Preferred stock, shares designated | 2,694,514 | |||||||
STB [Member] | ||||||||
Common stock, par value | $ 2.05 | |||||||
Share issued | 19,831,623 | |||||||
Gross proceeds | $ 40,654,827 | |||||||
Aggregate gross proceeds | $ 2,000,000 | |||||||
L1 Capital [Member] | Series B-1, Convertible Preferred Stock | ||||||||
Common stock, par value | $ 0.742245 | |||||||
Share issued | 2,694,514 | |||||||
Gross proceeds | $ 2,000,000 | |||||||
Aggregate gross proceeds | $ 2,000,000 |
DERIVATIVE LIABILITY (Details N
DERIVATIVE LIABILITY (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Apr. 27, 2020 | Jan. 27, 2020 | Nov. 25, 2019 | Aug. 27, 2019 | Nov. 30, 2021 | Nov. 30, 2020 | Feb. 29, 2020 | Nov. 30, 2019 | Aug. 31, 2021 | Aug. 31, 2019 | |
Interest accretion | $ 0 | $ 80,511 | $ 80,512 | |||||||
Convertible notes payable | $ 30,000 | |||||||||
Change in fair value of derivative liabilities | 0 | (92,642) | ||||||||
Discount on conversion into common stock | 25.00% | |||||||||
Derivative liability | $ 0 | $ 0 | $ 1,454,480 | |||||||
Derivative liability description | The Company used the following assumptions upon measurement: value per common share of $2.25, a remaining life of 1 month, an exercise price of $1.66, a risk-free rate of .04% and volatility of 162%. | |||||||||
(Gain) loss on change in fair value of derivative liability | $ 98,879 | $ 146,227 | ||||||||
Net income (loss) | 23,991 | (269,849) | ||||||||
Net income (loss) | $ (239,853) | $ (237,268) | ||||||||
Value per common share | $ 0.001 | $ 0.001 | ||||||||
Derivative Liability Summary [Member] | ||||||||||
Change in fair value of derivative liabilities | $ (301,581) | $ (146,227) | ||||||||
Derivatives liability [Member] | ||||||||||
Expected volatility rate | 265.00% | |||||||||
Exercise price | $ 50.82 | |||||||||
Value per common share | $ 2.25 | |||||||||
Expected term (in years) | 7 months 28 days | |||||||||
Recorded income from derivative liability | $ 7,735 | |||||||||
Risk-free interest rate | 0.05% | |||||||||
Derivatives [Member] | August 31, 2018 [Member] | ||||||||||
Expected volatility rate | 195.00% | |||||||||
Exercise price | $ 50.82 | |||||||||
Value per common share | $ 27.72 | |||||||||
Expected term (in years) | 3 years | |||||||||
Risk-free interest rate | 2.77% | |||||||||
Change in fair value of derivative liabilities | $ 7,735 | |||||||||
Detachable warrants | 27,532 | |||||||||
Exercisable period | 3 years | |||||||||
Debt/stock based issue costs | $ 674,012 | |||||||||
Monte Carlo Simulation Model [Member] | ||||||||||
Derivative liability | 587,772 | $ 929,300 | ||||||||
Debt instrument, discount | $ 57,115 | $ 55,500 | ||||||||
Life of debt instrument | 9 years | 6 years | ||||||||
Expected volatility rate | 304.00% | 281.00% | ||||||||
Exercise price | $ 1.28 | $ 3.13 | ||||||||
Risk-free interest rate | 0.17% | 1.57% | ||||||||
Value per common share | $ 3.17 | $ 6.65 | ||||||||
Loss on issuance of debt | $ 385,272 | $ 429,800 | ||||||||
Total Discount on debt | 259,615 | 555,000 | ||||||||
Derivative discount | 202,500 | $ 499,500 | ||||||||
Investor [Member] | ||||||||||
Conversion description | The note principal and interest are convertible into shares of common stock at a 35% discount to the lowest traded price of the Company’s common stock during the 10 prior trading days including the day the notice of conversion is received by the Company | |||||||||
Convertible promissory note | $ 555,000 | |||||||||
Convertible Promissory Note [Member] | Investor [Member] | ||||||||||
Convertible notes payable | $ 259,615 | 555,000 | ||||||||
Conversion description | The note principal and interest are convertible into shares of common stock at $0.02 per share or a 35% discount to the lowest traded price of the Company’s common stock during the 10 prior trading days including the day the notice of conversion is received by the Company | |||||||||
Derivative discount | $ 57,115 | $ 55,500 | ||||||||
Convertible Promissory Note 1 [Member] | ||||||||||
Convertible notes payable | $ 30,000 | |||||||||
Derivative liability | 50,277 | |||||||||
Derivative discount | 27,000 | |||||||||
Debt instrument, discount | $ 3,000 | |||||||||
Debt instrument, conversion rate, percentage | 25.00% | |||||||||
Derivative aggregated discount | 30,000 | |||||||||
Net income (loss) | 23,277 | |||||||||
Original issue discount | $ 3,000 | |||||||||
Debt/stock based issue costs | $ 10,000 | |||||||||
Convertible Promissory Note 1 [Member] | Derivative liabilities [Member] | ||||||||||
Expected volatility rate | 287.00% | |||||||||
Exercise price | $ 1.30 | |||||||||
Risk-free interest rate | 1.98% | |||||||||
Value per common share | $ 2.74 | |||||||||
Expected term (in years) | 6 years | |||||||||
Convertible Promissory Note 2 [Member] | ||||||||||
Derivative liability | 172,608 | |||||||||
Derivative discount | 126,000 | |||||||||
Derivative aggregated discount | 140,000 | |||||||||
Net income (loss) | 46,608 | |||||||||
Original issue discount | $ 14,000 | |||||||||
Terms of conversion feature | The note principal and interest are convertible into shares of common stock at a 35% discount to the lowest traded price of the Company’s common stock during the 10 prior trading days including the day the notice of conversion is received by the Company | |||||||||
Convertible promissory note payabe | $ 140,000 | |||||||||
Convertible Promissory Note 2 [Member] | Derivative liabilities [Member] | ||||||||||
Expected volatility rate | 275.00% | |||||||||
Exercise price | $ 0.93 | |||||||||
Risk-free interest rate | 1.61% | |||||||||
Value per common share | $ 1.54 | |||||||||
Expected term (in years) | 6 years |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Jan. 13, 2022 | Nov. 05, 2021 | Dec. 31, 2022 | Jun. 30, 2022 |
Closing Consideration of the purchase agreement | $ 41,504,827 | |||
Subsequent Event [Member] | ||||
Closing Consideration of the purchase agreement | $ 150,000 | $ 1,500,000 | $ 1,500,000 |