Cover
Cover - shares | 9 Months Ended | |
May 31, 2020 | Jul. 14, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | Allied Corp. | |
Entity Central Index Key | 0001575295 | |
Document Type | 10-Q | |
Amendment Flag | false | |
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 | May 31, 2020 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Entity Common Stock Shares Outstanding | 84,890,780 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Interim
Condensed Consolidated Interim Balance Sheets - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Current assets | ||
Cash | $ 39,384 | $ 1,080,882 |
Accounts receivable | 69,382 | 0 |
Inventory | 46,839 | 0 |
Amounts due from related parties (Note 12 (b)) | 20,596 | 23,517 |
Prepaid expenses | 144,318 | 2,313 |
Loan receivable (Note 15 (f)) | 101,728 | 0 |
Total current assets | 422,247 | 1,106,712 |
Deposits and advances (Note 5) | 2,125,933 | 2,158,658 |
Right-of-use assets (Note 8) | 90,002 | 0 |
Property, plant and equipment (Note 6) | 220,887 | 0 |
Intangible assets (Note 7) | 6,678,706 | 1,116,932 |
Total assets | 9,537,775 | 4,382,302 |
Current liabilities | ||
Accounts payable and accrued liabilities | 1,500,504 | 163,287 |
Loan payable to Allied (Note 12 (d)) | 0 | 4,051,162 |
Due to related party (Note 12 (b)) | 51,584 | 0 |
Current portion of lease liabilities (Note 8) | 5,728 | 0 |
Notes payable (Note 9) | 507,725 | 523,854 |
Convertible note payable (Note 10) | 510,181 | 0 |
Total current liabilities | 2,575,722 | 4,738,303 |
Lease liabilities, net of current portion (Note 8) | 85,217 | 0 |
Total liabilities | 2,660,939 | 4,738,303 |
Stockholders' equity (deficiency) | ||
Preferred stock - 50,000,000 shares authorized, $0.0001 par value Nil shares issued and outstanding | 0 | 0 |
Common stock - 300,000,000 shares authorized, $0.0001 par value; 83,930,780 shares issued and outstanding (93,228,000 - par value $0.0001 - August 31, 2019) | 8,393 | 9,323 |
Additional paid in capital | 10,851,729 | 908,762 |
Common stock issuable (Note 11) | 0 | 24,135 |
Stock subscription receivable | 0 | (364) |
Accumulated deficit | (4,009,463) | (1,300,803) |
Accumulated other comprehensive income | 26,177 | 2,946 |
Total stockholders' equity (deficiency) | 6,876,836 | (356,001) |
Total liabilities and stockholders' equity (deficiency) | $ 9,537,775 | $ 4,382,302 |
Condensed Consolidated Interi_2
Condensed Consolidated Interim Balance Sheets (Parenthetical) - $ / shares | May 31, 2020 | Aug. 31, 2019 |
Stockholders' equity (deficit) | ||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares par value | $ 0.0001 | $ 0.0001 |
Common stock, shares issued | 83,930,780 | 93,228,000 |
Common stock, shares outstanding | 83,930,780 | 93,228,000 |
Condensed Consolidated Interi_3
Condensed Consolidated Interim Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | |
Expenses | ||||
Amortization | $ 263,885 | $ 0 | $ 297,865 | $ 0 |
Charitable donations | 51,930 | 52,341 | 151,473 | 52,341 |
Consulting fees | 262,152 | 401,203 | 753,666 | 493,059 |
Foreign exchange loss (gain) | (53,314) | 886 | (57,233) | 971 |
Office and miscellaneous | 338,849 | 30,559 | 689,616 | 63,098 |
Professional fees | 161,680 | 91,454 | 501,030 | 113,960 |
Rent | 9,884 | 10,944 | 18,824 | 38,040 |
Research and development | 0 | 0 | 8,009 | 0 |
Travel | 48,787 | 74,417 | 116,157 | 94,022 |
Operating expenses | 1,083,853 | 661,804 | 2,479,107 | 855,491 |
Loss before other expenses | (1,083,853) | (661,804) | (2,479,107) | (855,491) |
Other expenses | ||||
Write-off of receivables | 0 | 0 | (54,765) | 0 |
Accretion | (130,371) | 0 | (174,788) | 0 |
Total other expense | (130,371) | 0 | (229,553) | 0 |
Net loss | (1,214,224) | (661,804) | (2,708,660) | (855,491) |
Other comprehensive income (loss) item: | ||||
Foreign currency translation adjustments | 17,492 | (5,389) | 23,231 | (2,299) |
Comprehensive loss | $ (1,196,732) | $ (667,193) | $ (2,685,429) | $ (857,790) |
Basic and diluted loss per share | $ (0.01) | $ (0.01) | $ (0.03) | $ (0.01) |
Weighted average number of common shares outstanding | 83,717,650 | 57,989,497 | 83,164,240 | 43,350,224 |
Condensed Consolidated Interi_4
Condensed Consolidated Interim Statements of Stockholders' of Equity (Deficiency) (Unaudited) - USD ($) | Total | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Stock Issuable [Member] | Stock subscription receivable [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (loss) [Member] |
Balance, shares at Aug. 31, 2019 | 93,228,000 | |||||||
Balance, amount at Aug. 31, 2019 | $ (356,001) | $ 9,323 | $ 0 | $ 908,762 | $ 24,135 | $ (364) | $ (1,300,803) | $ 2,946 |
Cancellation of common stock, shares | (10,459,220) | |||||||
Cancellation of common stock, amount | 0 | $ (1,046) | $ 0 | 1,046 | 0 | 0 | 0 | 0 |
Shares reacquired by treasury, shares | (4,500,000) | 4,500,000 | ||||||
Shares reacquired by treasury, amount | 0 | $ (450) | $ 450 | 0 | 0 | 0 | 0 | 0 |
Effect of reverse acquisition | 3,970,108 | 0 | 0 | 3,953,972 | 15,772 | 364 | 0 | 0 |
Common stock subscribed | 301,093 | 0 | 0 | 0 | 301,093 | 0 | 0 | 0 |
Comprehensive loss for the period | (463,847) | $ 0 | $ 0 | 0 | 0 | 0 | (458,167) | (5,680) |
Balance, shares at Nov. 30, 2019 | 78,268,780 | 4,500,000 | ||||||
Balance, amount at Nov. 30, 2019 | 3,451,353 | $ 7,827 | $ 450 | 4,863,780 | 341,000 | 0 | (1,758,970) | (2,734) |
Balance, shares at Aug. 31, 2019 | 93,228,000 | |||||||
Balance, amount at Aug. 31, 2019 | (356,001) | $ 9,323 | $ 0 | 908,762 | 24,135 | (364) | (1,300,803) | 2,946 |
Balance, shares at May. 31, 2020 | 83,930,780 | |||||||
Balance, amount at May. 31, 2020 | 6,876,836 | $ 8,393 | $ 0 | 10,851,729 | 0 | 0 | (4,009,463) | 26,177 |
Balance, shares at Nov. 30, 2019 | 78,268,780 | 4,500,000 | ||||||
Balance, amount at Nov. 30, 2019 | 3,451,353 | $ 7,827 | $ 450 | 4,863,780 | 341,000 | 0 | (1,758,970) | (2,734) |
Comprehensive loss for the period | (1,024,850) | $ 0 | $ 0 | 0 | 0 | 0 | (1,036,269) | 11,419 |
Shares issued for cash, shares | 370,000 | |||||||
Shares issued for cash, amount | 0 | $ 37 | $ 0 | 340,963 | (341,000) | 0 | 0 | 0 |
Shares issued on acquisition of assets, shares | 4,500,000 | (4,500,000) | ||||||
Shares issued on acquisition of assets, amount | 4,500,000 | $ 450 | $ (450) | 4,500,000 | 0 | 0 | 0 | 0 |
Share subscriptions received | 200,000 | 0 | 0 | 0 | 200,000 | 0 | 0 | 0 |
Beneficial conversion feature | 247,065 | $ 0 | $ 0 | 247,065 | 0 | 0 | 0 | 0 |
Balance, shares at Feb. 29, 2020 | 83,138,780 | |||||||
Balance, amount at Feb. 29, 2020 | 7,373,568 | $ 8,314 | $ 0 | 9,951,808 | 200,000 | 0 | (2,795,239) | 8,685 |
Comprehensive loss for the period | (1,196,732) | $ 0 | $ 0 | 0 | 0 | 0 | (1,214,224) | 17,492 |
Shares issued for cash, shares | 720,000 | |||||||
Shares issued for cash, amount | 700,000 | $ 72 | $ 0 | 899,928 | (200,000) | 0 | 0 | 0 |
Shares issued for finders fees, shares | 72,000 | |||||||
Shares issued for finders fees, amount | 0 | $ 7 | $ 0 | (7) | 0 | 0 | 0 | 0 |
Balance, shares at May. 31, 2020 | 83,930,780 | |||||||
Balance, amount at May. 31, 2020 | $ 6,876,836 | $ 8,393 | $ 0 | $ 10,851,729 | $ 0 | $ 0 | $ (4,009,463) | $ 26,177 |
Condensed Consolidated Interi_5
Condensed Consolidated Interim Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
May 31, 2020 | May 31, 2019 | |
Cash provided by (used in): Operating activities | ||
Net loss for the period | $ (2,708,660) | $ (855,491) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization | 297,865 | 0 |
Accretion | 174,788 | 0 |
Write-off of receivables | 54,765 | 0 |
Consulting services paid by shares issuable | 0 | 24,135 |
Change in operating assets and liabilities: | ||
Increase in accounts receivable | (58,217) | 0 |
Increase in inventory | (46,839) | 0 |
Increase in prepaid expenses | (133,301) | 0 |
Increase in deposits and advances | (105,839) | (1,444,179) |
Increase in due from related parties | (14,185) | 0 |
Increase of due to related party | 0 | 44,379 |
Increase in accounts payable and accrued liabilities | 813,863 | 1,472,701 |
Net Cash Provided By Used In Operating Activities | (1,725,760) | (758,456) |
Cash provided by (used in): Investing activities | ||
Purchase of intangible assets | 0 | (182,509) |
Purchase of property plant and equipment | (96,097) | 0 |
Cash obtained from acquisition of assets (Note 3 & 4) | 24,668 | 0 |
Cash paid and advances for the acquisition of assets (Note 4) | (1,010,630) | 0 |
Net Cash Provided By Used In Investing Activities | (1,082,059) | (182,509) |
Cash provided by (used in): Financing activities | ||
Proceeds from the convertible note payable | 588,000 | 0 |
Proceeds from related party loan | 0 | 493,068 |
Proceeds from the issuance of common stock, net | 1,176,000 | 671,052 |
Lease payments | (3,507) | 0 |
Net Cash Provided By Used In Financing Activities | 1,760,493 | 1,164,120 |
Effect of exchange rate on changes on cash | 5,828 | (2,299) |
(Decrease) Increase in cash | (1,041,498) | 220,856 |
Cash, beginning of period | 1,080,882 | 0 |
Cash, end of period | 39,384 | 220,856 |
Supplemental cash flow disclosures: | ||
Income taxes paid | 0 | 0 |
Interest paid | $ 0 | $ 0 |
Nature of operations, reverse t
Nature of operations, reverse take-over transaction and going concern | 9 Months Ended |
May 31, 2020 | |
Nature of operations, reverse take-over transaction and going concern | |
NOTE 1 - Nature of operations, reverse take-over transaction and going concern | a) Nature of operations Allied Corp. (the “Company or Allied”) (formerly named Cosmo Ventures Inc.) was incorporated in the State of Nevada on February 3, 2013. On July 1, 2019, the Company changed its name to “Allied Corp.” The Company’s business plan is to discover new medical technologies some of which are cannabis derived to target full scope therapy and support for trauma survivors, military veterans and first responders, however the Company has not begun any operations or obtained the required permits to begin operations. The head office and the registered office of the Company are located at 1405 St. Paul Street, Kelowna BC V1Y 2E4. On September 10, 2019, the Company was acquired in a reverse take over (“RTO”) transaction (see Note 1b) and the RTO is considered a purchase of the Company’s net assets (see Note 3) by AM (Advanced Micro) Biosciences, Inc. (“AM Biosciences”). For accounting purposes, the legal subsidiary, AM Biosciences has been treated as the acquirer and Allied Corp. the legal parent, has been treated as the acquiree. Accordingly, these consolidated financial statements reflect a continuation of the financial position, operating results, and cash flow of the Company’s legal subsidiary, AM Biosciences. On February 17, 2020, the Company acquired all the issued and outstanding share capital of a Colombian company, Medicolombia’s Cannabis S.A.S (Medicolombia), see Note 4. The assets, liabilities and results of Medicolombia are consolidated in these financial statements beginning from the February 17, 2020 acquisition date. b) Reverse take-over transaction (RTO) On July 25, 2019, as amended effective August 27, 2019, the Company entered into a Reorganization and Stock Purchase Agreement (the “Reorganization Agreement”) to acquire 100% of the issued and outstanding equity of AM (Advanced Micro) Biosciences, Inc (“AM Biosciences”). Effective September 10, 2019, the parties closed the Reorganization Agreement (the “Acquisition”). As part of the transaction, Pacific Capital Investment Group, Inc., the then majority shareholder of Allied (the “Allied Shareholder”) delivered 51,200,014 shares of common stock, representing approximately 65.25% of the outstanding equity of Allied Corp. to SECFAC Exchange Corp. on behalf of the prior shareholders of AM Biosciences and certain other designees of AM Biosciences. Further, as part of the transaction, the Allied Shareholder submitted for cancellation and return to treasury 10,459,220 shares of common stock. As a consequence, immediately subsequent to the close of the Reorganization Agreement, Allied had 78,468,780 shares of common stock outstanding. Pursuant to the Reorganization Agreement, effective on September 10, 2019, the Company acquired 100% of the issued and outstanding equity of AM Biosciences. As consideration for the equity of AM Biosciences, the Allied Shareholder issued and delivered 51,200,014 shares of common stock, representing approximately 65.25% of the outstanding equity of the Company to SECFAC Exchange Corp. on behalf of the previous shareholders of AM Biosciences and other designees of AM Biosciences. The Reorganization Agreement constitutes a reverse merger, such that AM Biosciences acquired control of Allied Corp. At the time of the Reorganization Agreement the operations of both Allied Corp. and AM Biosciences did not constitute businesses under ASC 805 “Business Combinations” and accordingly the transaction is considered a reverse asset acquisition in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). Under this method of accounting, AM Biosciences was deemed to be the accounting acquirer for financial reporting purposes. This determination was primarily based on the facts that, immediately following the acquisition: (i) AM Biosciences’ stockholders owned a substantial majority of the voting rights in the combined company, (ii) AM Biosciences designated a majority of the members of the initial board of directors of the combined company, and (iii) AM Biosciences’ senior management holds all key positions in the senior management of the combined company. As a result, as of the closing date of the acquisition, the net assets of the Company were recorded at their acquisition-date relative fair values in the condensed consolidated financial statements of the Company and the reported operating results prior to the acquisition will be those of AM Biosciences. c) Going concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company incurred a net loss for the nine month period ended of $2,708,660, has no operations at this time which will generate revenue and as at May 31, 2020 has a working capital deficit of $2,153,475. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon the Company’s ability to raise sufficient financing to acquire or develop a profitable business. Management intends on financing its operations and future development activities largely from the sale of equity securities with some additional funding from other traditional financing sources, including related party loans until such time that funds provided by future planned operations are sufficient to fund working capital requirements. d) Business Risks While some states in the United States have authorized the use and sale of cannabis, it remains illegal under federal law and the approach to enforcement of U.S. federal laws against cannabis is subject to change. Because the Company plans to engage in cannabis-related activities in the United States, it assumes certain risks due to conflicting state and federal laws. The federal law relating to cannabis could be enforced at any time and this would put the Company at risk of being prosecuted and having its assets seized. On January 4, 2018, United States Attorney General Jeff Sessions issued a memorandum to United States district attorneys (the ““Sessions Memorandum”“) which rescinded previous guidance from the United States Department of Justice specific to cannabis enforcement in the United States, including the Cole Memorandum. With the Cole Memorandum rescinded, United States federal prosecutors no longer have guidance relating to the exercise of their discretion in determining whether to prosecute cannabis related violations of United States federal law. In response to the Sessions Memorandum, on April 13, 2018, the United States President Donald Trump promised Colorado Senator Cory Gardner that he will support efforts to protect states that have legalized cannabis. Nevertheless, a significant change in the federal government’s enforcement policy with respect to current federal laws applicable to cannabis could cause significant financial damage to the Company. The Company may be irreparably harmed by a change in enforcement policies of the federal government depending on the nature of such change. Given the current illegality of cannabis under United States federal law, the Company’s ability to access both public and private capital may be hindered by the fact that certain financial institutions are regulated by the United States federal government and are thus prohibited from providing financing to companies engaged in cannabis related activities. The Company’s ability to access public capital markets in the United States is directly hindered as a result. The Company may, however, be able to access public and private capital markets in Canada in order to support continuing operations. |
Significant accounting policies
Significant accounting policies | 9 Months Ended |
May 31, 2020 | |
Significant accounting policies | |
NOTE 2 - Significant accounting policies | Significant accounting policies Basis Presentation These unaudited condensed consolidated interim financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), and are expressed in United States dollars. The Company’s fiscal year end is August 31. These unaudited condensed consolidated interim financial statements have been prepared in accordance with US GAAP for interim financial information and with the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q. They do not include all of the information and footnotes required by US GAAP to complete financial statements. Therefore, these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended August 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC. The unaudited condensed consolidated interim financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position at May 31, 2020, and the results of its operations for the nine months ended May 31, 2020 and cash flows for the nine months ended May 31, 2020. The results of operations for the period ended May 31, 2020 are not necessarily indicative of the results to be expected for future quarters or the full year. The significant accounting policies followed are: a) Principles of consolidation The unaudited condensed consolidated interim financial statements include accounts of Allied Corp. and its subsidiaries. Subsidiaries are consolidated from the date of acquisition and control and continue to be consolidated until the date that such control ceases. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect these returns through its power over the investee. All intercompany balances, income, expenses, and unrealized gains and losses resulting from intercompany transactions are eliminated on consolidation. b) Cash and cash equivalents Cash is comprised of cash on hand, cash held in trust accounts and demand deposits. Cash equivalents are short-term, highly liquid investments with maturities within nine months when acquired. The Company did not have any cash equivalents as of May 31, 2020. c) Property and Equipment Property and equipment are stated at cost. The Company depreciates the cost of property and equipment over their estimated useful lives at the following annual rates: Equipment 10 years straight-line basis Office and computer equipment 5 years straight-line basis Agricultural equipment 10 years straight-line basis d) Inventory Inventories are stated at the lower of cost or market. As of May 31, 2020, the inventory consisted of supplies of containers and packaging. e) Intangible assets At May 31, 2020, intangible assets include a purchased brand name and nine product assets, license application, product formulas and licenses which are being amortized over their estimated useful lives of 3 to 10 years. The Company’s purchased brand name and product formulas are amortized beginning from the date the products begin to be sold on a straight-line basis. The Company’s licenses are amortized over their economic or legal life on a straight-line basis, whichever is shorter. As the products have not yet been commercially manufactured or distributed for sale, no amortization has been recorded of the purchased brand name or product formulas. The licenses have been amortized from the date of acquisition. The Company periodically evaluates the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they are removed from the accounts. These assets are reviewed for impairment or obsolescence when events or changes in circumstances indicate that the carrying amount may not be recoverable. If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques. The Company has no intangibles with indefinite lives. For long-lived assets, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value. f) Long-lived assets In accordance with ASC 360, “Property, Plant and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value, which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. There were no impairment charges recorded during the nine months ended May 31, 2020. g) Foreign currency translation and functional currency conversion Items included in these unaudited condensed consolidated interim financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entities operate (the “functional currency”). Prior to September 10, 2019, the Company’s functional currency was the Canadian dollar. Translation gains and losses from the application of the U.S. dollar as the reporting currency during the period that the Canadian dollar was the functional currency are included as part of cumulative currency translation adjustment, which is reported as a component of shareholders’ equity under accumulated other comprehensive loss. The Company re-assessed its functional currency and determined as at September 10, 2019, its functional currency changed from the Canadian dollar to the U.S. dollar based on management’s analysis of changes in our organization including the RTO. The change in functional currency was accounted for prospectively from September 10, 2019 and financial statements prior were not restated for the change in functional currency. For periods commencing September 10, 2019, monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates in effect at the balance sheet date. Opening balances related to non-monetary assets and liabilities are based on prior period translated amounts, and non-monetary assets and non-monetary liabilities incurred after September 10, 2019 are translated at the approximate exchange rate prevailing at the date of the transaction. Revenue and expense transactions are translated at the approximate exchange rate in effect at the time of the transaction. Foreign exchange gains and losses are included in the statement of operations and comprehensive loss as foreign exchange gains. The Company assessed the functional currency for Medicolombia, a wholly owned subsidiary acquired by the Company on February 17, 2020 (see Note 4) to be Colombian peso. h) Share issuance costs Costs directly attributable to the raising of capital are charged against the related share capital. Costs related to shares not yet issued are recorded as deferred share issuance costs. These costs are deferred until the issuance of the shares to which the costs relate, at which time the costs will be charged against the related share capital or charged to operations if the shares are not issued. i) Research and development costs Research and development costs are expensed as incurred. j) Net income (loss) per common share Net income (loss) per share is calculated in accordance with ASC 260, “Earnings per Share.” The weighted-average number of common shares outstanding during each period is used to compute basic earning or loss per share. Diluted earnings or loss per share is computed using the weighted average number of shares and diluted potential common shares outstanding to the extent the effect would not be antidilutive. Dilutive potential common shares are additional common shares assumed to be exercised. Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding. k) Income taxes The Company accounts for income taxes under ASC 740 “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. l) Related party transactions Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company. The Company discloses related party transactions that are outside of normal compensatory agreements, such as salaries. Related party transactions are measured at the exchange amounts. m) Significant accounting estimates and judgments The preparation of the financial statements in conformity with US GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Although management uses historical experience and its best knowledge of the amount, events or actions to for the basis for judgments and estimates, actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the review affects both current and future periods. Significant estimates and assumptions included in these financial statements relate to the valuation assumptions related to the estimated useful lives and recoverability of long-lived assets, stock-based compensation, and deferred income tax assets and liabilities. Judgments are required in the assessment of the Company’s ability to continue to as going concern as described in Note 1. n) Financial instruments ASC 825, “Financial Instruments,” requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 825 prioritizes the inputs into three levels that may be used to measure fair value: Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The financial instruments consist principally of cash, accounts receivable, due from related parties, accounts payable, note payable, loan payable to Allied. due to related party and convertible note payable. The fair value of cash when applicable is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Company believes that the recorded values of all other financial instruments which are categorized as loans and receivables approximate their current fair values because of their nature and respective relatively short maturity dates or current market rates of interest for similar instruments. Assets measured at fair value on a recurring basis were presented on the Company’s balance sheet as May 31, 2020: Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant For Identical Observable Unobservable Instruments Inputs Inputs Balance as of (Level 1) (Level 2) (Level 3) May 31, 2020 Assets: Cash 39,384 – – 39,384 The Company does not have any liabilities measured at fair value on a recurring basis presented on the Company’s balance sheet as of May 31, 2020. Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash. The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions. Cash is carried at fair value using a level 1 fair value measurement. The carrying value of accounts payable approximates its fair value because of the short-term nature of the instrument. o) Reverse Acquisitions Identification of the Accounting Acquirer The Company considers factors in ASC 805-10-55-10 through 55-15 in identifying the accounting acquirer. The Company uses the existence of a controlling financial interest to identify the acquirer - the entity that obtains control of the acquiree. Other pertinent facts and circumstances also shall be considered in identifying the acquirer in a business combination effected by exchanging equity interests, including the following: (a) The relative voting rights in the combined entity after the business combination, where the acquirer usually is the combining entity whose owners as a group retain or receive the largest portion of the voting rights in the combined entity taking into consideration the existence of any unusual or special voting arrangements and options, warrants, or convertible securities; (b) the existence of a large minority voting interest in the combined entity if no other owner or organized group of owners has a significant voting interest, and where the acquirer usually is the combining entity whose single owner or organized group of owners holds the largest minority voting interest in the combined entity; (c) the composition of the governing body of the combined entity, where the acquirer usually is the combining entity whose owners have the ability to elect or appoint or to remove a majority of the members of the governing body of the combined entity; (d) the composition of the senior management of the combined entity, where the acquirer usually is the combining entity whose former management dominates the management of the combined entity; and (e) the terms of the exchange of equity interests, where the acquirer usually is the combining entity that pays a premium over the pre-combination Pursuant to ASC Paragraph 805-40-05-2, as one example of a reverse acquisition, a private operating entity may arrange for a public entity to acquire its equity interests in exchange for the equity interests of the public entity. In this situation, the public entity is the legal acquirer because it issued its equity interests, and the private entity is the legal acquiree because its equity interests were acquired. However, application of the guidance in ASC 805-10-55-11 through 55-15 results in identifying: (a) The public entity as the acquiree Measuring the Consideration Transferred Pursuant to ASC 805-40-30-2 and 30-3 in a reverse acquisition, the accounting acquirer usually issues no consideration for the acquiree. Instead, the accounting acquiree usually issues its equity shares to the owners of the accounting acquirer. Accordingly, the acquisition-date fair value Presentation of Condensed Consolidated Financial Statements Post Reverse Acquisition Pursuant to ASC 805-40-45-1 and 45-2, condensed consolidated financial statements following a reverse acquisition are issued under the name of the legal parent (accounting acquiree) but described in the notes as a continuation of the financial statements of the legal subsidiary (accounting acquirer), with one adjustment, which is to retroactively adjust the accounting acquirer’s legal capital to reflect the legal capital of the accounting acquiree. That adjustment is required to reflect the capital of the legal parent (the accounting acquiree). Comparative information presented in those condensed consolidated financial statements also is retroactively adjusted to reflect the legal capital of the legal parent (accounting acquiree). The condensed consolidated financial statements reflect all of the following: (a) The assets and liabilities of the legal subsidiary (the accounting acquirer) recognized and measured at their pre-combination carrying amounts; (b) the assets and liabilities of the legal parent (the accounting acquiree) recognized and measured in accordance with the guidance in Topic 805 ”Business Combinations” Accordingly, the equity structure of the legal subsidiary (the accounting acquirer) is restated using the exchange ratio established in the acquisition agreement to reflect the number of shares of the legal parent (the accounting acquiree) issued in the reverse acquisition; and (e) the non-controlling interest’s proportionate share of the legal subsidiary’s (accounting acquirer’s) pre-combination carrying amounts of retained earnings and other equity interests as discussed in ASC 805-40-25-2 and 805-40-30-3. Pursuant to ASC 805-40-45-4 and 45-5, in calculating the weighted-average number of common shares outstanding (the denominator of the earnings-per-share (“EPS”) calculation) during the period in which the reverse acquisition occurs: (a) The number of common shares outstanding from the beginning of that period to the acquisition date shall be computed on the basis of the weighted-average number of common shares of the legal acquiree (accounting acquirer) outstanding during the period multiplied by the exchange ratio established in the merger agreement; and (b) the number of common shares outstanding from the acquisition date to the end of that period shall be the actual number of common shares of the legal acquirer (the accounting acquiree) outstanding during that period. The basic EPS for each comparative period before the acquisition date presented in the condensed consolidated financial statements following a reverse acquisition shall be calculated by dividing (a) by (b): (a) The income of the legal acquiree attributable to common shareholders in each of those periods; and (b) the legal acquiree’s historical weighted-average number of common shares outstanding multiplied by the exchange ratio established in the acquisition agreement. As a result of the controlling financial interest of the former stockholders of AMBI, for financial statement reporting purposes, the asset acquisition has been treated as a reverse acquisition with AMBI deemed the accounting acquirer and the Company deemed the accounting acquiree under the acquisition method of accounting in accordance with ASC 805-10-55 of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). The reverse acquisition is deemed a capital transaction and the net assets of AMBI (the accounting acquirer) are carried forward to the Company (the legal acquirer and the reporting entity) at their carrying value before the acquisition. The acquisition process utilizes the capital structure of the Company and the assets and liabilities of AMBI which are recorded at their historical cost. The equity of the Company is the historical equity of AMBI. These consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries AM Biosciences effective from the date of the reverse take—over transaction on September 10, 2019 and Medicolombia (from the date of acquisition, February 17, 2020). All intercompany balances and transactions have been eliminated upon consolidation. p) Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update Leases The Company determines if an arrangement contains a lease in whole or in part at the inception of the contract. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term while lease liabilities represent our obligation to make lease payments arising from the lease. All leases with terms greater than twelve months result in the recognition of a ROU asset and a liability at the lease commencement date based on the present value of the lease payments over the lease term. Unless a lease provides all of the information required to determine the implicit interest rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments. The Company uses the implicit interest rate in the lease when readily determinable. Our lease terms include all non-cancelable periods and may include options to extend (or to not terminate) the lease when it is reasonably certain that we will exercise that option. Leases with terms of twelve months or less at the commencement date are expensed on a straight-line basis over the lease term and do not result in the recognition of an asset or liability. See Note 8 – Leases. |
Reverse Take-over Transaction
Reverse Take-over Transaction | 9 Months Ended |
May 31, 2020 | |
Reverse Take-over Transaction | |
NOTE 3 - Reverse Take-over Transaction | Pursuant to the Reorganization Agreement (see Note 1 (b)), effective on September 10, 2019, the Company acquired 100% of the issued and outstanding equity of AM Biosciences (the “Acquisition”). As consideration for the equity of AM Biosciences, the Allied Shareholder issued and delivered 51,200,014 shares of common stock, representing approximately 65.42% of the outstanding equity of the Company to SECFAC Exchange Corp. on behalf of the previous shareholders of AM Biosciences and other designees of AM Biosciences. The Acquisition, was accounted for as a reverse asset acquisition pursuant to Topic 805, Business Combinations, as substantially all of the fair value of the assets acquired were concentrated in a group of similar non-financial assets, and the acquired assets did not have outputs or employees. The total purchase price paid in the Acquisition has been allocated to the net assets acquired and liabilities assumed based on their fair values as of the completion of the Acquisition. The following summarizes the purchase price paid in the Acquisition: Number of shares of the combined organization owned by the Company’s pre-Merger stockholders 27,068,766 Multiplied by the fair value per share of AM Bioscience’s common stock $ 0.1142 Fair value of consideration issued to effect the Merger $ 3,091,253 The total purchase price of $3,091,253 was allocated to the fair value of the net assets of Allied as follows: Cash $ 12,894 Other current assets 9,527 Advances receivable 4,072,166 Current liabilities (99,386 ) Effect of RTO on equity (903,948 ) Purchase price $ 3,091,253 |
Acquisition of Medicolombia
Acquisition of Medicolombia | 9 Months Ended |
May 31, 2020 | |
Acquisition of Medicolombia | |
NOTE 4 - Acquisition of Medicolombia | On August 29, 2019, the Company entered into a Share Purchase Agreement (“Purchase Agreement”) with Dorson Commercial Corp. (“Dorson”) as the sole owner of Baleno Ltd. to purchase all of the issued and outstanding shares of Baleno Ltd., the sole owner of Medicolombia Cannabis S.A.S. (“Medicolombia”). Pursuant to the Purchase Agreement, the purchase price of Baleno Ltd. is $700,000 and 4,500,000 shares of Allied. The Company closed and completed the acquisition of Medicolombia through Baleno Ltd. on February 17, 2020. During the period leading up to the acquisition, the Company made additional advances to Dorson and Medicolombia totaling $310,630. The Company determined that Medicolombia did not meet the definition of a business found in ASC 805 Business Combinations The cost of the asset acquisition was allocated on a fair value basis to the net assets acquired. The Company allocated the cost of the assets as follows: Purchase Price Cash $ 700,000 Cash advances 310,630 Common stock issued 4,500,000 Liabilities assumed 576,273 Total Purchase Price $ 6,086,903 Fair Value of Assets Acquired Cash $ 11,774 Other assets 11,165 Right of use asset 100,720 Property, plant and equipment 125,957 Licenses 5,837,287 Total assets acquired $ 6,086,903 |
Deposits and advances
Deposits and advances | 9 Months Ended |
May 31, 2020 | |
Deposits and advances | |
NOTE 5 - Deposits and advances | May 31, 2020 August 31, 2019 a) Towards the purchase of prefabricated buildings $ 1,821,206 $ 1,199,081 b) Acquisition of shares on Dorson Commercial Corp - 871,645 c) Acquisition of Activated Nano 36,151 35,547 d) Acquisition of BwellMED - 37,418 e) Refundable deposits towards future land acquisitions 35,080 14,967 f) Vitalis equipment deposit 233,496 - Total deposits and advances $ 2,125,933 $ 2,158,658 a) At May 31, 2020, Company had deposits of $1,821,206 (August 31, 2019 - $1,199,081) to purchase prefabricated buildings. $509,770 of the deposits has not been paid as at May 31, 2020 and is included in accounts payable and accrued liabilities on the unaudited condensed consolidated balance sheets. As of May 31, 2020, the Company has not yet received the buildings and the amounts have been recorded as deposits. b) At May 31, 2020, the Company recorded $Nil (August 31, 2019 - $871,645) of deposits and advances relating to the acquisition described in Note 4. On February 17, 2020, the acquisition closed and the deposits and advances were applied to the purchase price and eliminated against intercompany accounts. c) At May 31, 2020, the Company recorded $36,151 (August 31, 2019 - $35,547) of deposits and advances relating to the acquisition of manufacturing equipment designed to produce pharmaceutical grade medicines as described in Note 15(a). d) On March 1, 2019, the Company entered into a Binding Letter of Intent with BwellMED International Holdings Ltd. (“BwellMED”), pursuant to which, the Company and BwellMED will amalgamate under the laws of the province of British Columbia to form Amalco (the “Amalgamation”). The stock holders of both companies will receive shares of the amalgamated company, and prior to the Amalgamation, the Company intends to advance BwellMED up to CAD$290,000 for working capital purposes. At May 31, 2020, the Company has advanced $38,054 (CAD$50,000) (August 31, 2019 - $37,418) to BwellMED which is refundable if the amalgamation does not close and has been recorded as a deposit. The Amalgamation is subject to entering into a definitive agreement and the Amalgamation has not occurred as of the date of these financial statements. During the nine months ended May 31, 2020, the Company wrote off $36,836 of advances and recognized a foreign exchange loss of $582. e) At May 31, 2020, the Company has entered into two purchase and sale agreements to acquire land as described in note 15(c). At May 31, 2020, Company had paid deposits totaling $35,080 (August 31, 2019 - $14,967). At May 31, 2020, Company had paid $233,496 to purchase equipment as described in Note 15(d). At May 31, 2020, the Company had not yet received the equipment and the amount paid has been recorded as a deposit. |
Property plant and equipment
Property plant and equipment | 9 Months Ended |
May 31, 2020 | |
Property plant and equipment | |
NOTE 6 - Property plant and equipment | At May 31, 2020, property, plant and equipment consisted of: Cost Foreign exchange $ Accumulated amortization Impairment May 31, 2020 Net carrying value August 31, 2019 Net carrying value Construction in progress 142,411 (3,797 ) – – 138,614 – Equipment 78,628 (675 ) 960 – 76,993 – Office equipment 420 (15 ) 5 - 400 Computer equipment 2,984 (65 ) 133 – 2,786 – Agricultural equipment 2,246 (83 ) 69 – 2,094 – 226,689 (4,635 ) 1,167 – 220,887 – |
Intangible assets
Intangible assets | 9 Months Ended |
May 31, 2020 | |
Intangible assets | |
NOTE 7 - Intangible assets | At May 31, 2020, intangible assets consisted of: Cost Foreign exchange $ Accumulated amortization Impairment May 31, 2020 Net carrying value August 31, 2019 Net carrying value Cannabis license application (b) 1,004,678 17,073 – – 1,021,751 1,004,678 Formulas (a) 56,127 954 – – 57,081 56,127 Brand name (a) 56,127 954 – – 57,081 56,127 Cannabis licenses (c) 5,837,287 – (294,494 ) – 5,542,793 – 6,954,219 18,981 (294,494 ) – 6,678,706 1,116,932 a) On February 13, 2019, the Company entered into an Asset Purchase Agreement (“APA”) to acquire the property and assets of Bud’s Pure Naturals Inc. for total consideration of up to 2,000,000 shares of the Company’s common stock. Pursuant to the APA, the Company has issued 1,000,000 shares of common stock on February 13, 2019. The remaining 1,000,000 shares of common stock are contingent upon the receipt of greater than $500,000 of gross profits by the Company from the acquired assets, and obtaining Cosmetic Notification Numbers from Health Canada for the products. If these events do not occur prior to February 13, 2021 then the additional shares are forfeited. The Company assessed the acquisition and determined that the acquisition did not meet the definition of a business found in ASU 2017-01. As the acquisition does not qualify as a business acquisition, the Company accounted for the transaction as an asset acquisition. As the fair value of the consideration was more reliably measurable than the intangible assets acquired the cost of the noncash asset received was based on the fair value of the consideration given. The cost of the assets acquired was the 1,000,000 shares issued which had an estimated fair value of $112,254 (CAD$150,000). The cost of the asset acquisition is allocated on a relative fair value basis to the net assets acquired. Based on their estimated relative fair values, the brand name had a fair value $56,127 (CAD$75,000) and the formulas acquired had a fair value of $56,127 (CAD$75,000). The additional 1,000,000 shares issuable upon the achievement of milestones represent contingent consideration for which the contingency is yet to be resolved. As the contingent consideration did not qualify for recognition at the acquisition date or at August 31, 2019 under ASC 480 or ASC 815, the Company will recognize the additional payment when the contingency is resolved, and the additional shares are paid or become payable. b) On February 13, 2019, the Company entered into two Share Purchase Agreements with the same vendors to acquire 100% of the outstanding shares of Falcon Ridge Naturals Ltd and 473650 B.C. Ltd. In consideration for the all the issued and outstanding shares of two entities, the Company paid $374,182 (CAD$500,000) cash, issued a $523,854 (CAD$700,000) promissory note and 950,000 common shares with a fair value of $106,642 (CAD$142,500). The note is non-interest bearing and due within 5 days of the date the Company receives the Health Canada License. The primary purpose of the acquisitions was to acquire a cannabis license, and the license is in the application stage and submitted to Health Canada, however approval for the license has not been received to date. The Company assessed the acquisition and determined that the acquisitions did not meet the definition of a business found in ASU 2017-01. As the acquisitions did not qualify as business acquisitions, the Company accounted for the transactions as an asset acquisition. The cost of the asset acquisition is allocated on a relative fair value basis to the net assets acquired. The Company is required to allocate the cost to the individual assets acquired or liabilities assumed, based on their relative fair values. As the sole asset acquired by the Company was a cannabis license application the entire $1,004,678 (CAD $1,342,500) cost of the acquisition was allocated to the license application. The cost of the license was the $374,182 (CAD$500,000) paid the $523,854 (CAD$700,000) promissory note issued and the fair value of the 950,000 common shares issued of $106,642 (CAD$142,500). c) On February 17, 2020, the Company acquired $5,837,287 of licenses as part of the Medicolumbia acquisition described in Note 4. The licenses acquired are issued by the Republic of Colombia and include the use of seeds for growing Cannabis, production of derivatives from Cannabis for medicinal and scientific use, cultivation of Cannabis plants, and producer of seeds. The Company has recorded amortization of these licenses of $294,494 for the period ended May 31, 2020. |
Leases
Leases | 9 Months Ended |
May 31, 2020 | |
Leases | |
NOTE 8 - Leases | In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which establishes a ROU model that requires a lessee to record a ROU asset and a lease liability, measured on a discounted basis, on the balance sheet for all leases with terms longer than 12 months. The Company also elected to keep all leases with an initial term of 12 months or less off the balance sheet. The adoption of Topic 842 did not result in any adjustment to retained earnings. The Company did not have any leases until the acquisition of Medicolombia during the nine months ended May 31, 2020. The acquisition resulted in the addition of $97,014 of operating lease assets and liabilities. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the ROU asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the ROU asset result in straight-line rent expense over the lease term. For finance leases, interest on the lease liability and the amortization of the ROU asset results in front-loaded expense over the lease term. ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. At May 31, 2020, the Company did not have any finance leases. At May 31, 2020, the weighted average remaining operating lease term was 10 years and the weighted average discount rate associated with operating leases was 10%. The components of lease expenses were as follows: Operating lease cost: $ Amortization of right-of-use assets 2,204 Interest on lease liabilities 2,212 Total operating lease cost 4,416 The following table provides supplemental cash flow and other information related to leases for the period ended May 31, 2020: Lease payments 3,507 Supplemental balance sheet information related to leases as of May 31, 2020 are as below: Right-of-use assets $ Cost 97,014 Accumulated amortization (7,012 ) 90,002 Current portion of lease liabilities 5,728 Lease liabilities, net of current portion 85,217 Total lease liabilities 90,945 Future minimum lease payments related to lease obligations are as follows: 2020 3,641 2021 14,565 2022 14,565 2023 14,565 2024 14,565 Thereafter 81,321 Total minimum lease payments 143,222 Less: amount of lease payments representing effects of discounting (52,277 ) Present value of future minimum lease payments 90,945 |
Promissory Note
Promissory Note | 9 Months Ended |
May 31, 2020 | |
Promissory Note | |
NOTE 9 - Promissory note | On May 31, 2019, as part of the asset acquisition described in Note 4 the Company issued a $507,725 (CAD$700,000) promissory note. The note is unsecured, non-interest bearing and due 5 days following the Company’s receipt of the Health Canada License. |
Convertible Note
Convertible Note | 9 Months Ended |
May 31, 2020 | |
Convertible Note | |
NOTE 10 - Convertible Note | On January 23, 2020, the Company issued two convertible notes with an total face value of $600,000 (the “Notes”) and warrants to purchase 240,000 shares of the Company’s common stock at $1.25 per share for 1 year. The Notes were issued with an original discount of $12,000, and bear interest at 10% per annum compounded monthly. The notes matures on July 20, 2020 and are convertible into shares of the Company’s common stock at any time prior to maturity at a conversion price of $1.25 per share. The Company has evaluated whether separate financial instruments with the same terms as the conversion features above would meet the characteristics of a derivative instrument as described in paragraphs ASC 815-15-25. The Company determined that there was no derivative liability associated with the debenture or warrants under ASC 815-15 Derivatives and Hedging. The terms of the contracts do not permit net settlement, as the shares delivered upon conversion are not readily convertible to cash. The Company’s trading history indicated that the shares are thinly traded and the market would not absorb the sale of the shares issued upon conversion without significantly affecting the price. As the conversion features would not meet the characteristics of a derivative instrument as described in paragraphs ASC 815-15-25, the conversion features are not required to be separated from the host instrument and accounted for separately. As a result, at May 31, 2020, the conversion features and warrants would not meet derivative classification. The relative fair values of the convertible note and the warrants were $470,467 and $117,533 respectively. The effective conversion price was then determined to be $0.98. As the stock price at the issuance date was greater than the effective conversion price, it was determined that there was a beneficial conversion feature. The Company recognized the relative fair value of the shares issuable of $129,533 and an equivalent discount. The Company then recognized the relative fair value of the warrants of $117,534 as additional-paid-in capital and an equivalent discount that further reduced the carrying value of the convertible debt to $352,933. The beneficial conversion feature of $129,533, the original issue discount of $12,000 and the relative fair value of the warrants of $117,534 discounted the convertible debenture such that the carrying value of the convertible debt on the date of issue was $340,933. The discount is being expensed over the term of the loan to increase the carrying value to the face value of the loan. During the nine months ended May 31, 2020, the Company recorded accretion of discount of $169,248 increasing the carrying value of the loan to $510,181. As at May 31, 2020, the Company has recorded accrued interest of $21,609, which is included in the balance of accounts payable and accrued liabilities on the unaudited condensed consolidated interim balance sheets. |
Equity
Equity | 9 Months Ended |
May 31, 2020 | |
Equity | |
NOTE 11 - Equity | On July 10, 2019, the Shareholders of the Company and the Board of Directors approved the of Amendment to Our Articles of Incorporation (i) changing the name of the Corporation to Allied Corp. and (ii) increasing the authorized capital stock of the Corporation from 75,000,000 to 300,000,000 shares of common stock, par value $0.0001 per share and 50,000,000 shares of preferred stock, par value $0.0001 per share; and the approval of a 6.666 shares for each one share stock dividend on the Corporation’s common stock which became effective August 7, 2019 when it was accepted by FINRA. The effects of the stock split have been reflected in the financial statements. On July 1, 2019, the Company amended the articles of incorporation to change the par value of the authorized common stock and preferred stock from $0.001 to $0.0001. Pursuant to the Acquisition described in Note 1, the Allied Shareholder submitted for cancellation and return to treasury 10,459,220 shares of common stock, a further 4,500,000 shares a common stock were returned to treasury for re-issuance as consideration for the acquisition of assets described in Note 4. On December 1, 2019, the Company issued 130,000 common shares at $0.50 per share, for which gross cash proceeds of $65,000 had previously been received. In January 2020, the Company issued 240,000 shares of common stock at $1.25 per share for gross cash proceeds of $300,000. The Company paid cash finders fees of $24,000 as part of the financing. On March 6, 2020, the Company issued 240,000 shares of common stock at $1.25 per share for gross cash proceeds of $300,000. On March 9, 2020, the Company issued 200,000 shares of common stock at $1.25 per share for gross proceeds of $250,000 On March 12, 2020, the Company issued 120,000 common shares at $1.25 per share for cash proceeds of $150,000, and 56,000 shares were paid as a finder’s fee. On May 20, 2020, the Company issued 160,000 common shares at $1.25 per share for cash proceeds of $200,000, and 16,000 shares were paid as a finder’s fee. At May 31, 2020, the Company had nil (August 31, 2019 - 215,000) shares of common stock issuable for gross proceeds of $Nil (August 31, 2019 – 32,250). |
Related party transactions and
Related party transactions and balances | 9 Months Ended |
May 31, 2020 | |
Related party transactions and balances | |
NOTE 12 - Related party transactions and balances | All transactions with related parties have occurred in the normal course of operations and are recorded at the exchange amount which is the amount agreed to by the Company and the related party. a) Key management compensation and related party transactions The Company has identified its directors and certain senior officers as its key management personnel. The compensation costs for key management personnel for the nine months ended May 31, 2020 and 2019 were as follows: May 31, 2020 May 31, 2019 Consulting fees and benefits $ 437,341 $ 143,647 b) Amounts due to/from related parties In the normal course of operations the company shares certain administrative resources with companies related by common management and directors. The administrative resources and services, which were provided in the normal course of operations, were measured at the exchange amount. All amounts payable and receivable are non-interest bearing, unsecured and due on demand. The following table summarizes the amounts were due from related parties: May 31, 2020 August 31, 2019 1206217 B.C. Ltd $ - $ 1,105 Equilibrium Bio Canada Corp. - 3,461 Inca Hemp Corp. - 5,706 International Animal Care - 6,953 Tactical Relief LLC 20,596 3,205 Tayrona Biosciences Inc. - 3,087 $ 20,596 $ 23,517 As of May 31, 2020, the Company advanced $20,596 (August 31, 2019 - $23,517) to related parties for future expenses. During the nine months ended May 31, 2020, the Company wrote off $17,929 of amounts due from related parties. At May 31, 2020, the Company owed $51,584 to shareholders (August 31, 2019 - $nil). c) Other related party transactions During the period ended May 31, 2019, the Company entered into a lease agreement with a company controlled by an officer of the Company. The Company and the lessor agreed to terminate this lease agreement effective May 1, 2019. During the period ended May 31, 2019 the Company paid $15,302 in relation to these leased premises. d) Loan payable to Allied At August 31, 2019, the Company had received advances of $4,051,162 from Allied prior to the Acquisition described in Note 11. The amount was unsecured, non-interest bearing and was due on demand. On September 10, 2019, the Acquisition closed, and the loan was eliminated upon consolidation. |
Financial risk factors
Financial risk factors | 9 Months Ended |
May 31, 2020 | |
Financial risk factors | |
NOTE 13 - Financial risk factors | The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows: a) Credit risk: Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is on its cash account, accounts receivable and loan receivable. Cash accounts are held with major banks in Canada. The Company has deposited its cash with a bank from which management believes the risk of loss is low. The management has assessed the risk of loss for accounts receivable and loan receivable to be low. b) Liquidity risk: Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company’s approach to managing liquidity is to ensure that it will have sufficient liquidity to meet liabilities when due. Accounts payable are due within the current operating period. The Company has a working capital deficit and requires additional financing to meet its current obligations (see Note 1). c) Market risk: Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. The Company is not exposed to market risk. d) Interest rate risk: Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk, from time to time, on its cash balances. Surplus cash, if any, is placed on call with financial institutions and management actively negotiates favorable market related interest rates. e) Foreign exchange risk: Foreign currency risk is limited to the portion of the Company’s business transactions denominated in currencies other than the US dollar. The Company has not entered into any foreign currency contracts to mitigate risk, but manages the risk my minimizing the value of financial instruments denominated in foreign currency. The Company is exposed to foreign currency risk to the extent that the following monetary assets and liabilities are denominated in Canadian dollars: May 31, 2020 Balance in Canadian dollars: Cash and cash equivalents $ - Accounts receivable 90,000 Accounts payable (205,133 ) Net exposure (115,133 ) Balance in US dollars: $ (95,713 ) A 10% change in the US dollar to the Canadian dollar exchange rate would impact the Company’s net loss by approximately $9,571 for the period ended May 31, 2020 (August 31, 2019 – $92,226). The Company is exposed to foreign currency risk to the extent that the following monetary assets and liabilities are denominated in Colombian Pesos: May 31, 2020 Balance in Colombian Pesos dollars: Cash and cash equivalents $ 40,000,000 Accounts receivable 21,992,228 Accounts payable (2,166,127,248 ) Net exposure (2,104,135,020 ) Balance in US dollars: $ (567,528 ) A 10% change in the US dollar to the Colombian Peso exchange rate would impact the Company’s net loss by approximately $56,753 for the period ended May 31, 2020 (August 31, 2019 – $Nil). |
Capital management
Capital management | 9 Months Ended |
May 31, 2020 | |
Capital management | |
NOTE 14 - Capital management | The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the business and continue as a going concern. The Company considers capital to be all accounts in equity. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business. The Company has a working capital deficit and requires additional capital to finance is future business plans. The Company is not subject to any externally imposed capital requirements. |
Commitments
Commitments | 9 Months Ended |
May 31, 2020 | |
Commitments | |
NOTE 15 - Commitments | a) On May 22, 2019, the Company entered into an agreement to purchase manufacturing equipment designed to produce pharmaceutical grade medicines. Pursuant to the agreement the Company will acquire the equipment in exchange for CAD$125,000 and 250,000 common shares. The Company also agreed to pay the vendor a royalty equal to CAD$0.01 per milligram of product produced by the equipment for three years following the effective date. The maximum royalty payable is CAD$250,000 and the Company can prepay the CAD$250,000 maximum royalty at any time. As of May 31, 2020, the Company had issued 250,000 common shares with a fair value of CAD$37,500 and paid CAD$10,000. At May 31, 2020, the $36,151 (CAD$47,500) has been recorded as a deposit until the remaining purchase price is paid and the equipment is received. b) On May 31, 2019, the Company entered into a consulting agreement. Pursuant to the agreement, the consultant will provide services in exchange for CAD$210,000 (paid), 215,000 shares of common stock and CAD$30,000 per month until January 1, 2020. The consulting agreement was amended in November 2019 and as result the monthly cash amount was amended to $6,041 per month and no further fees were paid. At May 31, 2020 the Company was owed $69,367 (CAD $90,000). c) On November 6, 2018, the Company signed an assignment to purchase two separate lots located at 8999 Jim Bailey Road in Kelowna British Columbia, Canada. The land is zoned I2 General Industrial and allow for “Cannabis Production Facilities” as a principal use. The Company has also entered to a separate modular building purchase agreement to acquire and construct an 8,700 square foot facility to be used as a certified Cannabis Cultivation and extraction facility. The total commitment for the two parcels of land are CAD$1,942,250 (US$ 1,457,367) (Lot 1 - $988,550, Lot 2 - CAD$953,700). During the period ended August 31, 2019, the Company executed several “offer to purchase amendments” to defer the assignment and close of the two parcels of land. On November 11, 2019, the Company executed an additional offer to purchase amendment to extend the assignment and close of the land parcels no later than February 10, 2020 and there was an additional amendment to extend the close of the purchase to May 2020. On May 7, 2020, the Company assigned the purchase of Lot 1 to a third party. In June 2020, the Company entered into a lease agreement to lease Lot 1 from the third party for an annual rent of CAD$70,442 for 10 years commencing June 1, 2020 until May 31, 2030. Also see Note 19(a). In November 2019, the board of directors determined the Company would not close on Lot 2 as the parcel of land will not be required for future operations. As a result, the Company does not have a commitment to pay the value of CAD$953,700 for the land and will eligible to receive or assign the initial refundable deposit of CAD$10,000 as well as the return of the CAD$15,000 security deposit paid to access the land early. During the nine months ended May 31, 2020, this contract of purchase and sale for LOT 2 – 8999 Jim Bailey Road was assigned to another non related party. d) On August 30, 2019, the Company entered into sales agreement to purchase an extraction system to for future operational use in Colombia. (Note 15(b)) The equipment has a value of CAD$658,260. The terms of the agreement require the Company full amount in monthly installments starting September 1, 2019 and will continue to February 2020. The equipment will be paid in full before the equipment is shipped to Colombia and title transfers to the Company. At May 31, 2020, the $233,496 has been recorded as a deposit until the remaining purchase price is paid and the equipment is received. e) In September 2019, the Company entered into a letter of intent to form a 50:50 owned joint venture (“CBD Asia”) to purchase and distribute the Company’s products into Asia. Pursuant to the letter of intent the Company would own 50% of the proposed joint venture and the Company provided a loan of $100,000 to set up the joint venture and fund initial operations. This amount will be repaid from the initial revenues of the joint venture prior to distributing dividends. In December 2019, the Company signed a definitive agreement consistent to the terms of the letter of intent. At May 31, 2020, the Company had advanced $101,728 which has been recorded as a loan. f) On May 29, 2020, the Company entered into a research and consultancy agreement to contract a third party in research and development services. Pursuant to the agreement, the Company shall pay a total of €200,000 (approximately $221,000) to the third party in three installments according to the milestones as outlined in the agreement with an upfront payment of €75,000 (approximately $83,000) on the agreement date. As of May 31, 2020, the upfront payment has not been paid and is included in the balance of accounts payable and accrued liabilities on the unaudited condensed consolidated interim balance sheets. g) On June 3, 2020, the Company entered into a financing agreement with a third party to obtain funds to pay for the prefabricated buildings (Note 5(a)) in the amount of $1,253,772. Pursuant to the agreement, the Company is obligated to pay $71,023 at commencement date effective May 29, 2020, and a monthly interest of $37,613 for six months starting on June 29, 2020. The principal is due on November 26, 2020. As of May 31, 2020, the amount of $71,023 due at commencement date has not been paid and is included in the balance of accounts payable and accrued liabilities on the unaudited condensed consolidated interim balance sheets. |
Share purchase warrants
Share purchase warrants | 9 Months Ended |
May 31, 2020 | |
Share purchase warrants | |
NOTE 16 - Share purchase warrants | The following table summarizes the continuity of share purchase warrants: Number of warrants Weighted average exercise price $ Balance, August 31, 2019 - Issued 240,000 1.25 Balance, May 31, 2020 240,000 1.25 As at May 31, 2020, the following share purchase warrants were outstanding: Number of warrants Exercise price $ Expiry date 240,000 1.25 January 23, 2021 |
Non-cash activities
Non-cash activities | 9 Months Ended |
May 31, 2020 | |
Non-cash activities | |
NOTE 17 - Non-cash activities | For the Nine Months Ended May 31, 2020 From Inception on September 10, 2018 to May 31, 2019 Non-cash activities: Common stock issued pursuant to asset acquisitions 4,500,000 113,351 Beneficial conversion feature 129,533 - Relative fair value of warrants issued with convertible note 117,534 - Original debt discount against convertible notes 12,000 - Net liabilities acquired in Medicolombias Acquisition (301,328 ) - |
Segment information
Segment information | 9 Months Ended |
May 31, 2020 | |
NOTE 18 - Segment information | During the period ended May 31, 2019 and as of August 31, 2019, the Company had only one operating segment. During the nine months ended May 31, 2020, the Company had two operating segments including: a) Medicolombia Cannabis S.A.S., a Columbian based company through which the Company intends to commence commercial production in Colombia (Medicolombia). b) Allied Corp. which consists of the rest of the Company’s operations (Allied). Factors used to identify the Company’s reportable segments include the organizational structure of the Company and the financial information available for evaluation by the chief operating decision-maker in making decisions about how to allocate resources and assess performance. The Company’s operating segments have been broken out based on similar economic and other qualitative criteria. The Company operates the Allied reporting segment in one geographical area (Canada), and the Medicolombia reporting segment in one geographical area (Colombia). Financial statement information by operating segment for the three months ended May 31, 2020 is presented below: Allied $ Medicolombia $ Total $ Net Sales - - - Net (Loss) (787,737 ) (426,487 ) (1,214,224 ) Accretion 124,831 5,540 130,371 Depreciation and amortization - 263,885 263,885 Financial statement information by operating segment for the nine months ended May 31, 2020 is presented below: Allied $ Medicolombia $ Total $ Net Sales - - - Net (Loss) (2,222,918 ) (485,742 ) (2,708,660 ) Accretion 169,248 5,540 174,788 Depreciation and amortization - 297,865 297,865 Total Assets as of May 31, 2020 3,616,770 5,921,005 9,537,775 Geographic information for the three and nine months ended and as at May 31, 2020 is presented below: Revenues $ Total Assets $ Canada - 3,616,770 Colombia - 5,921,005 Total - 9,537,775 |
Subsequent events
Subsequent events | 9 Months Ended |
May 31, 2020 | |
Subsequent events | |
NOTE 19 - Subsequent events | a) Subsequent to May 31, 2020, the Company entered into an agreement to lease the land described in Note 5(e) and 15(c). The lease is for a 10-year term, expiring on May 31, 2030, with one 10-year renewal option and an option for the Company to purchase the land for approximately CAD$1,200,000. The base rent due under the lease agreement is CAD$5,870 per month. b) On June 8, 2020, the Company issued 960,000 shares of common stock at $1.25 per share for gross cash proceeds of $1,200,000. c) In June 2020, the Company entered into a financing agreement to finance the buildings described in Note 5(a). Pursuant to the agreement, the Company financed $1,253,772 of the purchase price. The Company will pay $71,023 at commencement date on May 29, 2020, make six monthly interest payments of $37,613 commencing June 20, 2020 and repay the principal of $1,253,772 on November 20, 2020. Also see Note 15(g). d) On July 1, 2020, the Company entered into amendments to the convertible notes described in Note 10. Pursuant to the amendments, beginning on July 1, 2020, the convertible notes will bear simple interest at 5% per annum. The maturity date of the convertible notes was amended to due on demand on or before October 31, 2020. In consideration for extending the maturity date, the Company issued to the convertible notes holders 16,000 common shares of the Company and warrants to purchase additional 320,000 common shares of the Company at $1.25 per share expiring October 31, 2020. |
Significant accounting polici_2
Significant accounting policies (Policies) | 9 Months Ended |
May 31, 2020 | |
Significant accounting policies | |
Basis Presentation | These unaudited condensed consolidated interim financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), and are expressed in United States dollars. The Company’s fiscal year end is August 31. These unaudited condensed consolidated interim financial statements have been prepared in accordance with US GAAP for interim financial information and with the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q. They do not include all of the information and footnotes required by US GAAP to complete financial statements. Therefore, these unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended August 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC. The unaudited condensed consolidated interim financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position at May 31, 2020, and the results of its operations for the nine months ended May 31, 2020 and cash flows for the nine months ended May 31, 2020. The results of operations for the period ended May 31, 2020 are not necessarily indicative of the results to be expected for future quarters or the full year. |
Principles of consolidation | The unaudited condensed consolidated interim financial statements include accounts of Allied Corp. and its subsidiaries. Subsidiaries are consolidated from the date of acquisition and control and continue to be consolidated until the date that such control ceases. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect these returns through its power over the investee. All intercompany balances, income, expenses, and unrealized gains and losses resulting from intercompany transactions are eliminated on consolidation. |
Cash and cash equivalents | Cash is comprised of cash on hand, cash held in trust accounts and demand deposits. Cash equivalents are short-term, highly liquid investments with maturities within nine months when acquired. The Company did not have any cash equivalents as of May 31, 2020. |
Property and Equipment | Property and equipment are stated at cost. The Company depreciates the cost of property and equipment over their estimated useful lives at the following annual rates: Equipment 10 years straight-line basis Office and computer equipment 5 years straight-line basis Agricultural equipment 10 years straight-line basis |
Inventory | Inventories are stated at the lower of cost or market. As of May 31, 2020, the inventory consisted of supplies of containers and packaging. |
Intangible assets | At May 31, 2020, intangible assets include a purchased brand name and nine product assets, license application, product formulas and licenses which are being amortized over their estimated useful lives of 3 to 10 years. The Company’s purchased brand name and product formulas are amortized beginning from the date the products begin to be sold on a straight-line basis. The Company’s licenses are amortized over their economic or legal life on a straight-line basis, whichever is shorter. As the products have not yet been commercially manufactured or distributed for sale, no amortization has been recorded of the purchased brand name or product formulas. The licenses have been amortized from the date of acquisition. The Company periodically evaluates the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they are removed from the accounts. These assets are reviewed for impairment or obsolescence when events or changes in circumstances indicate that the carrying amount may not be recoverable. If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques. The Company has no intangibles with indefinite lives. For long-lived assets, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value. |
Long-lived assets | In accordance with ASC 360, “Property, Plant and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value, which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value. There were no impairment charges recorded during the nine months ended May 31, 2020. |
Foreign currency translation and functional currency conversion | Items included in these unaudited condensed consolidated interim financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entities operate (the “functional currency”). Prior to September 10, 2019, the Company’s functional currency was the Canadian dollar. Translation gains and losses from the application of the U.S. dollar as the reporting currency during the period that the Canadian dollar was the functional currency are included as part of cumulative currency translation adjustment, which is reported as a component of shareholders’ equity under accumulated other comprehensive loss. The Company re-assessed its functional currency and determined as at September 10, 2019, its functional currency changed from the Canadian dollar to the U.S. dollar based on management’s analysis of changes in our organization including the RTO. The change in functional currency was accounted for prospectively from September 10, 2019 and financial statements prior were not restated for the change in functional currency. For periods commencing September 10, 2019, monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates in effect at the balance sheet date. Opening balances related to non-monetary assets and liabilities are based on prior period translated amounts, and non-monetary assets and non-monetary liabilities incurred after September 10, 2019 are translated at the approximate exchange rate prevailing at the date of the transaction. Revenue and expense transactions are translated at the approximate exchange rate in effect at the time of the transaction. Foreign exchange gains and losses are included in the statement of operations and comprehensive loss as foreign exchange gains. The Company assessed the functional currency for Medicolombia, a wholly owned subsidiary acquired by the Company on February 17, 2020 (see Note 4) to be Colombian peso. |
Share issuance costs | Costs directly attributable to the raising of capital are charged against the related share capital. Costs related to shares not yet issued are recorded as deferred share issuance costs. These costs are deferred until the issuance of the shares to which the costs relate, at which time the costs will be charged against the related share capital or charged to operations if the shares are not issued. |
Research and development costs | Research and development costs are expensed as incurred |
Net income (loss) per common share | Net income (loss) per share is calculated in accordance with ASC 260, “Earnings per Share.” The weighted-average number of common shares outstanding during each period is used to compute basic earning or loss per share. Diluted earnings or loss per share is computed using the weighted average number of shares and diluted potential common shares outstanding to the extent the effect would not be antidilutive. Dilutive potential common shares are additional common shares assumed to be exercised. Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding. |
Income taxes | The Company accounts for income taxes under ASC 740 “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. |
Related party transactions | Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company. The Company discloses related party transactions that are outside of normal compensatory agreements, such as salaries. Related party transactions are measured at the exchange amounts. |
Significant accounting estimates and judgments | The preparation of the financial statements in conformity with US GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Although management uses historical experience and its best knowledge of the amount, events or actions to for the basis for judgments and estimates, actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the review affects both current and future periods. Significant estimates and assumptions included in these financial statements relate to the valuation assumptions related to the estimated useful lives and recoverability of long-lived assets, stock-based compensation, and deferred income tax assets and liabilities. Judgments are required in the assessment of the Company’s ability to continue to as going concern as described in Note 1. |
Financial instruments | ASC 825, “Financial Instruments,” requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 825 prioritizes the inputs into three levels that may be used to measure fair value: Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The financial instruments consist principally of cash, accounts receivable, due from related parties, accounts payable, note payable, loan payable to Allied, due to related party and convertible note payable. The fair value of cash when applicable is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Company believes that the recorded values of all other financial instruments which are categorized as loans and receivables approximate their current fair values because of their nature and respective relatively short maturity dates or current market rates of interest for similar instruments. Assets measured at fair value on a recurring basis were presented on the Company’s balance sheet as May 31, 2020: Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant For Identical Observable Unobservable Instruments Inputs Inputs Balance as of (Level 1) (Level 2) (Level 3) May 31, 2020 Assets: Cash 39,384 – – 39,384 The Company does not have any liabilities measured at fair value on a recurring basis presented on the Company’s balance sheet as of May 31, 2020. Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash. The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions. Cash is carried at fair value using a level 1 fair value measurement. The carrying value of accounts payable approximates its fair value because of the short-term nature of the instrument. |
Reverse Acquisitions | Identification of the Accounting Acquirer The Company considers factors in ASC 805-10-55-10 through 55-15 in identifying the accounting acquirer. The Company uses the existence of a controlling financial interest to identify the acquirer - the entity that obtains control of the acquiree. Other pertinent facts and circumstances also shall be considered in identifying the acquirer in a business combination effected by exchanging equity interests, including the following: (a) The relative voting rights in the combined entity after the business combination, where the acquirer usually is the combining entity whose owners as a group retain or receive the largest portion of the voting rights in the combined entity taking into consideration the existence of any unusual or special voting arrangements and options, warrants, or convertible securities; (b) the existence of a large minority voting interest in the combined entity if no other owner or organized group of owners has a significant voting interest, and where the acquirer usually is the combining entity whose single owner or organized group of owners holds the largest minority voting interest in the combined entity; (c) the composition of the governing body of the combined entity, where the acquirer usually is the combining entity whose owners have the ability to elect or appoint or to remove a majority of the members of the governing body of the combined entity; (d) the composition of the senior management of the combined entity, where the acquirer usually is the combining entity whose former management dominates the management of the combined entity; and (e) the terms of the exchange of equity interests, where the acquirer usually is the combining entity that pays a premium over the pre-combination Pursuant to ASC Paragraph 805-40-05-2, as one example of a reverse acquisition, a private operating entity may arrange for a public entity to acquire its equity interests in exchange for the equity interests of the public entity. In this situation, the public entity is the legal acquirer because it issued its equity interests, and the private entity is the legal acquiree because its equity interests were acquired. However, application of the guidance in ASC 805-10-55-11 through 55-15 results in identifying: (a) The public entity as the acquiree Measuring the Consideration Transferred Pursuant to ASC 805-40-30-2 and 30-3 in a reverse acquisition, the accounting acquirer usually issues no consideration for the acquiree. Instead, the accounting acquiree usually issues its equity shares to the owners of the accounting acquirer. Accordingly, the acquisition-date fair value Presentation of Condensed Consolidated Financial Statements Post Reverse Acquisition Pursuant to ASC 805-40-45-1 and 45-2, condensed consolidated financial statements following a reverse acquisition are issued under the name of the legal parent (accounting acquiree) but described in the notes as a continuation of the financial statements of the legal subsidiary (accounting acquirer), with one adjustment, which is to retroactively adjust the accounting acquirer’s legal capital to reflect the legal capital of the accounting acquiree. That adjustment is required to reflect the capital of the legal parent (the accounting acquiree). Comparative information presented in those condensed consolidated financial statements also is retroactively adjusted to reflect the legal capital of the legal parent (accounting acquiree). The condensed consolidated financial statements reflect all of the following: (a) The assets and liabilities of the legal subsidiary (the accounting acquirer) recognized and measured at their pre-combination carrying amounts; (b) the assets and liabilities of the legal parent (the accounting acquiree) recognized and measured in accordance with the guidance in Topic 805 ”Business Combinations” Accordingly, the equity structure of the legal subsidiary (the accounting acquirer) is restated using the exchange ratio established in the acquisition agreement to reflect the number of shares of the legal parent (the accounting acquiree) issued in the reverse acquisition; and (e) the non-controlling interest’s proportionate share of the legal subsidiary’s (accounting acquirer’s) pre-combination carrying amounts of retained earnings and other equity interests as discussed in ASC 805-40-25-2 and 805-40-30-3. Pursuant to ASC 805-40-45-4 and 45-5, in calculating the weighted-average number of common shares outstanding (the denominator of the earnings-per-share (“EPS”) calculation) during the period in which the reverse acquisition occurs: (a) The number of common shares outstanding from the beginning of that period to the acquisition date shall be computed on the basis of the weighted-average number of common shares of the legal acquiree (accounting acquirer) outstanding during the period multiplied by the exchange ratio established in the merger agreement; and (b) the number of common shares outstanding from the acquisition date to the end of that period shall be the actual number of common shares of the legal acquirer (the accounting acquiree) outstanding during that period. The basic EPS for each comparative period before the acquisition date presented in the condensed consolidated financial statements following a reverse acquisition shall be calculated by dividing (a) by (b): (a) The income of the legal acquiree attributable to common shareholders in each of those periods; and (b) the legal acquiree’s historical weighted-average number of common shares outstanding multiplied by the exchange ratio established in the acquisition agreement. As a result of the controlling financial interest of the former stockholders of AMBI, for financial statement reporting purposes, the asset acquisition has been treated as a reverse acquisition with AMBI deemed the accounting acquirer and the Company deemed the accounting acquiree under the acquisition method of accounting in accordance with ASC 805-10-55 of the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC). The reverse acquisition is deemed a capital transaction and the net assets of AMBI (the accounting acquirer) are carried forward to the Company (the legal acquirer and the reporting entity) at their carrying value before the acquisition. The acquisition process utilizes the capital structure of the Company and the assets and liabilities of AMBI which are recorded at their historical cost. The equity of the Company is the historical equity of AMBI. These consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries AM Biosciences effective from the date of the reverse take—over transaction on September 10, 2019 and Medicolombia (from the date of acquisition, February 17, 2020). All intercompany balances and transactions have been eliminated upon consolidation. |
Leases | In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update Leases The Company determines if an arrangement contains a lease in whole or in part at the inception of the contract. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term while lease liabilities represent our obligation to make lease payments arising from the lease. All leases with terms greater than twelve months result in the recognition of a ROU asset and a liability at the lease commencement date based on the present value of the lease payments over the lease term. Unless a lease provides all of the information required to determine the implicit interest rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments. The Company uses the implicit interest rate in the lease when readily determinable. Our lease terms include all non-cancelable periods and may include options to extend (or to not terminate) the lease when it is reasonably certain that we will exercise that option. Leases with terms of twelve months or less at the commencement date are expensed on a straight-line basis over the lease term and do not result in the recognition of an asset or liability. See Note 8 – Leases. |
Significant accounting polici_3
Significant accounting policies (Tables) | 9 Months Ended |
May 31, 2020 | |
Significant accounting policies | |
Schedule of property and equipment | Equipment 10 years straight-line basis Office and computer equipment 5 years straight-line basis Agricultural equipment 10 years straight-line basis |
Schedule of fair value measurements | Assets measured at fair value on a recurring basis were presented on the Company’s balance sheet as May 31, 2020: Fair Value Measurements Using Quoted Prices in Significant Active Markets Other Significant For Identical Observable Unobservable Instruments Inputs Inputs Balance as of (Level 1) (Level 2) (Level 3) May 31, 2020 Assets: Cash 39,384 – – 39,384 |
Reverse Take-over Transaction (
Reverse Take-over Transaction (Tables) | 9 Months Ended |
May 31, 2020 | |
Reverse Take-over Transaction | |
Schedule of purchase price paid in acquisition | Number of shares of the combined organization owned by the Company’s pre-Merger stockholders 27,068,766 Multiplied by the fair value per share of AM Bioscience’s common stock $ 0.1142 Fair value of consideration issued to effect the Merger $ 3,091,253 |
Schedule of fair value of net assets | Cash $ 12,894 Other current assets 9,527 Advances receivable 4,072,166 Current liabilities (99,386) Effect of RTO on equity (903,948) Purchase price $ 3,091,253 |
Acquisition of Medicolombia (Ta
Acquisition of Medicolombia (Tables) | 9 Months Ended |
May 31, 2020 | |
Acquisition of Medicolombia | |
Schedule of Cost of the asset acquisition | Purchase Price Cash $ 700,000 Cash advances 310,630 Common stock issued 4,500,000 Liabilities assumed 576,273 Total Purchase Price $ 6,086,903 Fair Value of Assets Acquired Cash $ 11,774 Other assets 11,165 Right of use asset 100,720 Property, plant and equipment 125,957 Licenses 5,837,287 Total assets acquired $ 6,086,903 |
Deposits and advances (Tables)
Deposits and advances (Tables) | 9 Months Ended |
May 31, 2020 | |
Deposits and advances | |
Schedule of deposits and advances | May 31, 2020 August 31, 2019 a) Towards the purchase of prefabricated buildings $ 1,821,206 $ 1,199,081 b) Acquisition of shares on Dorson Commercial Corp - 871,645 c) Acquisition of Activated Nano 36,151 35,547 d) Acquisition of BwellMED - 37,418 e) Refundable deposits towards future land acquisitions 35,080 14,967 f) Vitalis equipment deposit 233,496 - Total deposits and advances $ 2,125,933 $ 2,158,658 |
Property plant and equipment (T
Property plant and equipment (Tables) | 9 Months Ended |
May 31, 2020 | |
Property plant and equipment | |
Schedule of property plant and equipment | Cost Foreign exchange $ Accumulated amortization Impairment May 31, 2020 Net carrying value August 31, 2019 Net carrying value Construction in progress 142,411 (3,797 ) – – 138,614 – Equipment 78,628 (675 ) 960 – 76,993 – Office equipment 420 (15 ) 5 - 400 Computer equipment 2,984 (65 ) 133 – 2,786 – Agricultural equipment 2,246 (83 ) 69 – 2,094 – 226,689 (4,635 ) 1,167 – 220,887 – |
Intangible assets (Tables)
Intangible assets (Tables) | 9 Months Ended |
May 31, 2020 | |
Intangible assets | |
Schedule of intangible assets | Cost Foreign exchange $ Accumulated amortization Impairment May 31, 2020 Net carrying value August 31, 2019 Net carrying value Cannabis license application (b) 1,004,678 17,073 – – 1,021,751 1,004,678 Formulas (a) 56,127 954 – – 57,081 56,127 Brand name (a) 56,127 954 – – 57,081 56,127 Cannabis licenses (c) 5,837,287 – (294,494 ) – 5,542,793 – 6,954,219 18,981 (294,494 ) – 6,678,706 1,116,932 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
May 31, 2020 | |
Leases | |
Schedule of components of lease expenses | Operating lease cost: $ Amortization of right-of-use assets 2,204 Interest on lease liabilities 2,212 TTotal operating lease cost 4,416 |
Schedule of supplemental cash flow and other information related to leases | Lease payments 3,507 |
Schedule of supplemental balance sheet information related to leases | Right-of-use assets $ Cost 97,014 Accumulated amortization (7,012 ) 90,002 CCurrent portion of lease liabilities 5,728 LLease liabilities, net of current portion 85,217 Total lease liabilities 90,945 |
Schedule of future minimum lease payments | 2020 3,641 2021 14,565 2022 14,565 2023 14,565 2024 14,565 Thereafter 81,321 Total minimum lease payments 143,222 Less: amount of lease payments representing effects of discounting (52,277 ) Present value of future minimum lease payments 90,945 |
Related party transactions an_2
Related party transactions and balances (Tables) | 9 Months Ended |
May 31, 2020 | |
Related party transactions and balances | |
Schedule of related party compensation costs | May 31, 2020 May 31, 2019 Consulting fees and benefits $ 437,341 $ 143,647 |
Schedule of due from related party | May 31, 2020 August 31, 2019 1206217 B.C. Ltd $ - $ 1,105 Equilibrium Bio Canada Corp. - 3,461 Inca Hemp Corp. - 5,706 International Animal Care - 6,953 Tactical Relief LLC 20,596 3,205 Tayrona Biosciences Inc. - 3,087 $ 20,596 $ 23,517 |
Financial risk factors (Tables)
Financial risk factors (Tables) | 9 Months Ended |
May 31, 2020 | |
Financial risk factors | |
Schedule of foreign currency translation | May 31, 2020 Balance in Canadian dollars: Cash and cash equivalents $ - Accounts receivable 90,000 Accounts payable (205,133 ) Net exposure (115,133 ) Balance in US dollars: $ (95,713 ) A 10% change in the US dollar to the Canadian dollar exchange rate would impact the Company’s net loss by approximately $9,571 for the period ended May 31, 2020 (August 31, 2019 – $92,226). The Company is exposed to foreign currency risk to the extent that the following monetary assets and liabilities are denominated in Colombian Pesos: May 31, 2020 Balance in Colombian Pesos dollars: Cash and cash equivalents $ 40,000,000 Accounts receivable 21,992,228 Accounts payable (2,166,127,248 ) Net exposure (2,104,135,020 ) Balance in US dollars: $ (567,528 ) |
Share purchase warrants (Tables
Share purchase warrants (Tables) | 9 Months Ended |
May 31, 2020 | |
Share purchase warrants | |
Schedule of Warrants issued | Number of Weighted average exercise price Balance, August 31, 2019 - Issued 240,000 1.25 Balance, May 31, 2020 240,000 1.25 |
Schedule of warrants outstanding | Number of warrants Exercise Expiry date 240,000 1.25 January 23, 2021 |
Non-cash activities (Tables)
Non-cash activities (Tables) | 9 Months Ended |
May 31, 2020 | |
Non-cash activities | |
Schedule of Non-cash activities | For the Nine Months Ended May 31, 2020 From Inception on September 10, 2018 to May 31, 2019 Non-cash activities: Common stock issued pursuant to asset acquisitions 4,500,000 113,351 Beneficial conversion feature 129,533 - Relative fair value of warrants issued with convertible note 117,534 - Original debt discount against convertible notes 12,000 - Net liabilities acquired in Medicolombias Acquisition (301,328 ) - |
Segment information (Tables)
Segment information (Tables) | 9 Months Ended |
May 31, 2020 | |
Schedule of operating segment | Financial statement information by operating segment for the three months ended May 31, 2020 is presented below: Allied $ Medicolombia $ Total $ Net Sales - - - Net (Loss) (787,737 ) (426,487 ) (1,214,224 ) Accretion 124,831 5,540 130,371 Depreciation and amortization - 263,885 263,885 Financial statement information by operating segment for the nine months ended May 31, 2020 is presented below: Allied $ Medicolombia $ Total $ Net Sales - - - Net (Loss) (2,222,918 ) (485,742 ) (2,708,660 ) Accretion 169,248 5,540 174,788 Depreciation and amortization - 297,865 297,865 Total Assets as of May 31, 2020 3,616,770 5,921,005 9,537,775 |
Schedule of geographic information | Revenues $ Total Assets $ Canada - 3,616,770 Colombia - 5,921,005 Total - 9,537,775 |
Nature of operations reverse ta
Nature of operations reverse takeover transaction and going concern (Details Narrative) - USD ($) | Sep. 10, 2019 | Sep. 10, 2019 | Sep. 10, 2019 | Jul. 25, 2019 | May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | Aug. 31, 2019 | Jul. 02, 2019 |
Common stock, shares outstanding | 83,930,780 | 83,930,780 | 93,228,000 | |||||||
Cancellation of treasury stock | 10,459,220 | 10,459,220 | 10,459,220 | 10,459,220 | ||||||
Net loss | $ (1,214,224) | $ (661,804) | $ (2,708,660) | $ (855,491) | ||||||
Working capital deficit | $ (2,153,475) | |||||||||
Reorganization Agreement [Member] | Pacific Capital Investment Group, Inc. [Member] | ||||||||||
Acquire percentage | 100.00% | 100.00% | 100.00% | 100.00% | ||||||
Business aquisition, common stock issued by related party to SECFAC | 51,200,014 | 51,200,014 | 51,200,014 | |||||||
Description of delivered as part of the transaction | Representing approximately 65.25% of the outstanding equity of the Company to SECFAC Exchange Corp. on behalf of the previous shareholders of AM Biosciences | Representing approximately 65.25% of the outstanding equity of the Company to SECFAC Exchange Corp. on behalf of the previous shareholders of AM Biosciences |
Significant accounting polici_4
Significant accounting policies (Details) | 9 Months Ended |
May 31, 2020 | |
Equipment [Member] | |
Estimated useful lives | 10 years |
Office and Computer Equipment [Member] | |
Estimated useful lives | 5 years |
Agricultural Equipment [Member] | |
Estimated useful lives | 10 years |
Significant accounting polici_5
Significant accounting policies (Details 1) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Cash | $ 39,384 | $ 1,080,882 |
Quoted Prices In Active Markets For Identical Instruments Level 1 [Member] | ||
Cash | 39,384 | |
Significant Other Observable Inputs Level 2 [Member] | ||
Cash | 0 | |
Significant Unobservable Inputs Level 3 [Member] | ||
Cash | $ 0 |
Significant accounting polici_6
Significant accounting policies (Details Narrative) | 9 Months Ended |
May 31, 2020 | |
Maximum [Member] | |
Estimated useful lives | 10 years |
Minimum [Member] | |
Estimated useful lives | 3 years |
Reverse Takeover Transaction (D
Reverse Takeover Transaction (Details) | 9 Months Ended |
May 31, 2020USD ($)$ / sharesshares | |
Reverse Takeover Transaction (Details) | |
Number of shares of the combined organization owned by the Company's pre-Merger stockholders | shares | 27,068,766 |
Multiplied by the fair value per share of AM Bioscience's common stock | $ / shares | $ 0.1142 |
Fair value of consideration issued to effect the Merger | $ | $ 3,091,253 |
Reverse Takeover Transaction _2
Reverse Takeover Transaction (Details 1) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Cash | $ 39,384 | $ 1,080,882 |
Current liabilities | 2,575,722 | $ 4,738,303 |
Fair Value Of Net Assets [Member] | ||
Cash | 12,894 | |
Other current assets | 9,527 | |
Advances receivable | 4,072,166 | |
Current liabilities | (99,386) | |
Effect of RTO on equity | (903,948) | |
Purchase price | $ 3,091,253 |
Reverse Takeover Transaction _3
Reverse Takeover Transaction (Details Narrative) - USD ($) | Sep. 10, 2019 | Sep. 10, 2019 | Sep. 10, 2019 | Jul. 25, 2019 | May 31, 2020 |
Purchase price | $ 3,091,253 | ||||
Reorganization Agreement [Member] | Pacific Capital Investment Group, Inc. [Member] | |||||
Acquire percentage | 100.00% | 100.00% | 100.00% | 100.00% | |
Description of delivered as part of the transaction | Representing approximately 65.42% of the outstanding equity of the Company to SECFAC Exchange Corp. on behalf of the previous shareholders of AM Biosciences and other designees of AM Biosciences. | ||||
Business aquisition, common stock issued by related party to SECFAC | 51,200,014 | 51,200,014 | 51,200,014 |
Acquisition of Medicolombia (De
Acquisition of Medicolombia (Details) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Cash | $ 39,384 | $ 1,080,882 |
Purchase Price [Member] | ||
Cash | 700,000 | |
Cash advances | 310,630 | |
Common stock issued | 4,500,000 | |
Liabilities assumed | 576,273 | |
Total Purchase price | 6,086,903 | |
Fair Value of Assets Acquired [Member] | ||
Cash | 11,774 | |
Other assets | 11,165 | |
Right of use asset | 100,720 | |
Property, plant and equipment | 125,957 | |
Licenses | 5,837,287 | |
Total assets acquired | $ 6,086,903 |
Acquisition of Medicolombia (_2
Acquisition of Medicolombia (Details Narrative) - Share Purchase Agreement [Member] - Dorson Commercial Corp [Member] | 1 Months Ended |
Aug. 29, 2019USD ($)shares | |
Business aquisition, share purchase | shares | 4,500,000 |
Purchase price of business aquisition | $ 700,000 |
Advances to affiliate | $ 310,630 |
Deposits and advances (Details)
Deposits and advances (Details) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Total deposits and advances | $ 2,125,933 | $ 2,158,658 |
Total deposits and advances | 2,125,933 | 2,158,658 |
Acquisition of shares on Dorson Commercial Corp [Member] | ||
Total deposits and advances | 0 | 871,645 |
Towards the purchase of prefabricated buildings [Member] | ||
Total deposits and advances | 1,821,206 | 1,199,081 |
Acquisition of Activated Nano [Member] | ||
Total deposits and advances | 36,151 | 35,547 |
Acquisition of BwellMED [Member] | ||
Total deposits and advances | 0 | 37,418 |
Refundable deposits towards future land acquisitions [Member] | ||
Total deposits and advances | 35,080 | 14,967 |
Vitalis equipment deposit [Member] | ||
Total deposits and advances | $ 233,496 | $ 0 |
Deposits and advances (Details
Deposits and advances (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | Aug. 31, 2019 | |
Total deposits and advances | $ 2,125,933 | $ 2,125,933 | $ 2,158,658 | ||
Foregin exchange loss | (53,314) | $ 886 | (57,233) | $ 971 | |
Acquisition of shares on Dorson Commercial Corp [Member] | |||||
Total deposits and advances | 0 | 0 | 871,645 | ||
Vitalis equipment deposit [Member] | |||||
Total deposits and advances | 233,496 | 233,496 | 0 | ||
Refundable deposits towards future land acquisitions [Member] | |||||
Total deposits and advances | 35,080 | 35,080 | 14,967 | ||
Acquisition of BwellMED [Member] | |||||
Total deposits and advances | 0 | 0 | 37,418 | ||
Acquisition of BwellMED [Member] | March 1, 2019 [Member] | |||||
Total deposits and advances | 38,054 | 38,054 | 37,418 | ||
Foregin exchange loss | (582) | ||||
Bad debts written off | 36,836 | ||||
Acquisition of Activated Nano [Member] | |||||
Total deposits and advances | 36,151 | 36,151 | 35,547 | ||
Towards the purchase of prefabricated buildings [Member] | |||||
Total deposits and advances | 1,821,206 | 1,821,206 | $ 1,199,081 | ||
Accounts payable | $ 509,770 | $ 509,770 |
Property plant and equipment (D
Property plant and equipment (Details) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Cost | $ 226,689 | $ 0 |
Foreign exchange | (4,635) | |
Accumulated amortization | 1,167 | |
Impairment | 0 | |
Net carrying value | 220,887 | 0 |
Construction in progress [Member] | ||
Cost | 142,411 | |
Accumulated amortization | 0 | |
Impairment | 0 | |
Foreign exchanges | (3,797) | |
Net carrying value | 138,614 | 0 |
Equipment [Member] | ||
Cost | 78,628 | |
Accumulated amortization | 960 | |
Impairment | 0 | |
Net carrying value | 76,993 | 0 |
Foreign exchanged | (675) | |
Office equipment [Member] | ||
Cost | 420 | |
Foreign exchange | (15) | |
Accumulated amortization | 5 | |
Impairment | 0 | |
Net carrying value | 400 | |
Computer equipment [Member] | ||
Cost | 2,984 | |
Foreign exchange | (65) | |
Accumulated amortization | 133 | |
Impairment | 0 | |
Net carrying value | 2,786 | 0 |
Agriculture equipment [Member] | ||
Cost | 2,246 | |
Foreign exchange | (83) | |
Accumulated amortization | 69 | |
Impairment | 0 | |
Net carrying value | $ 2,094 | $ 0 |
Intangible assets (Details)
Intangible assets (Details) | 9 Months Ended |
May 31, 2020USD ($) | |
Intangible assets net carrying value, beginning | $ 1,116,932 |
Intangible assets net carrying value, ending | 6,678,706 |
Cannabis License Application [Member] | |
Intangible assets net carrying value, beginning | 1,004,678 |
Cost | 1,004,678 |
Foreign exchange | 17,073 |
Accumulated amortization | 0 |
Impairment | 0 |
Intangible assets net carrying value, ending | 1,021,751 |
Formulas [Member] | |
Intangible assets net carrying value, beginning | 56,127 |
Cost | 56,127 |
Foreign exchange | 954 |
Accumulated amortization | 0 |
Impairment | 0 |
Intangible assets net carrying value, ending | 57,081 |
Brand Name [Member] | |
Intangible assets net carrying value, beginning | 56,127 |
Cost | 56,127 |
Foreign exchange | 954 |
Accumulated amortization | 0 |
Impairment | 0 |
Intangible assets net carrying value, ending | 57,081 |
Cannabis Licenses (c) [Member] | |
Intangible assets net carrying value, beginning | 0 |
Cost | 5,837,287 |
Foreign exchange | 0 |
Accumulated amortization | 294,494 |
Impairment | 0 |
Intangible assets net carrying value, ending | 5,542,793 |
Total Intangible Assets [Member] | |
Intangible assets net carrying value, beginning | 1,116,932 |
Cost | 6,954,219 |
Foreign exchange | 18,981 |
Accumulated amortization | 294,494 |
Impairment | 0 |
Intangible assets net carrying value, ending | $ 6,678,706 |
Intangible assets (Details Narr
Intangible assets (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | |||
Feb. 13, 2019 | May 31, 2020 | Aug. 31, 2019 | May 31, 2019 | Feb. 17, 2019 | |
Shares issuable upon achivements | 1,000,000 | ||||
Issuance of promissiory notes | $ 507,725 | ||||
Remaining shares issuable upon condition | 0 | 215,000 | |||
Cannabis License Application [Member] | |||||
Business Acquisition, Equity Interest, value assigned | $ 106,642 | ||||
Business acquisition, shares issued | 950,000 | ||||
Cost of aquisition | $ 374,182 | ||||
Issuance of promissiory notes | 523,854 | ||||
Total cost of license acquisition | 1,004,678 | ||||
Two Share Purchase Agreement [Member] | |||||
Business Acquisition, Equity Interest, value assigned | $ 106,642 | ||||
Business acquisition, shares issued | 950,000 | ||||
Cost of aquisition | $ 374,182 | ||||
Issuance of promissiory notes | $ 523,854 | ||||
Business acquisition, ownership percentage | 100.00% | ||||
Asset Purchase Agreement [Member] | |||||
Business acquisition, consideration transferred | 2,000,000 | ||||
Business acquisition, share issued | 1,000,000 | ||||
Remaining shares issuable upon condition | 1,000,000 | ||||
Shares issuable upon minimum gross profit | $ 500,000 | ||||
Estimated fair value of shares issued, shares | 1,000,000 | ||||
Estimated fair value of shares issued, value | $ 112,254 | ||||
Business acquisition description | If these events do not occur prior to February 13, 2021 then the additional shares are forfeited. | ||||
Formulas [Member] | |||||
Cost of intangible assets | $ 56,127 | ||||
Brand Name [Member] | |||||
Cost of intangible assets | 56,127 | ||||
Medicolumbia [Member] | |||||
Acquisition of licenses | $ 5,837,287 | ||||
Amortization of licenses | $ 294,494 |
Leases (Details)
Leases (Details) | 9 Months Ended |
May 31, 2020USD ($) | |
Operating lease cost: | |
Amortization of right-of-use assets | $ 2,204 |
Interest on lease liabilities | 2,212 |
Total operating lease cost | $ 4,416 |
Leases (Details 1)
Leases (Details 1) | 9 Months Ended |
May 31, 2020USD ($) | |
Leases | |
Lease payments | $ 3,507 |
Leases (Details 2)
Leases (Details 2) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Leases | ||
Cost | $ 97,014 | |
Accumulated amortization | (7,012) | |
Right of use assets | 90,002 | $ 0 |
Current portion of lease liabilities | 5,728 | |
Lease liabilities, net of current portion | 85,217 | |
Total lease liabilities | $ 90,945 |
Leases (Details 3)
Leases (Details 3) | May 31, 2020USD ($) |
Leases | |
2020 | $ 3,641 |
2021 | 14,565 |
2022 | 14,565 |
2023 | 14,565 |
2024 | 14,565 |
Thereafter | 81,321 |
Total minimum lease payments | 143,222 |
Less: amount of lease payments representing effects of discounting | (52,277) |
Present value of future minimum lease payments | $ 90,945 |
Leases (Details Narrative)
Leases (Details Narrative) | May 31, 2020USD ($) |
Leases | |
Operating lease assets and liabilities | $ 97,014 |
Weighted average discount rate operating leases | 10.00% |
Weighted average remaining operating lease term | 10 years |
Promissory Note (Details Narrat
Promissory Note (Details Narrative) | May 31, 2019USD ($) |
Related party transactions and balances | |
Promissory note issued | $ 507,725 |
Convertible Note (Details Narra
Convertible Note (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jan. 23, 2020 | May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | Aug. 31, 2019 | |
Fair value of convetible notes | $ 470,467 | $ 470,467 | ||||
Fair value of warrants | $ 117,533 | $ 117,533 | ||||
Conversion price | $ 0.98 | $ 0.98 | ||||
Sharess issuable | 129,533 | 129,533 | ||||
Convertible debt | $ 352,933 | $ 352,933 | ||||
Beneficial conversion feature | 129,533 | |||||
Original issue discount | 12,000 | 12,000 | ||||
Convertible debt discounted | 340,933 | 340,933 | ||||
Loan amount increased | 510,181 | 510,181 | ||||
Accrued interest | 21,609 | 21,609 | ||||
Accretion | 130,371 | $ 0 | 174,788 | $ 0 | ||
Additional paid in capital | 10,851,729 | 10,851,729 | $ 908,762 | |||
Two Convertible Notes [Member] | ||||||
Conversion price | $ 1.25 | |||||
Convertible notes payable | $ 600,000 | |||||
Warrants issued to purchase common shares | 240,000 | |||||
Warrant exercised price | $ 1.25 | |||||
Debt discount | $ 12,000 | |||||
Interest rate | 10.00% | |||||
Maturity date | Jul. 20, 2020 | |||||
Warrant [Member] | ||||||
Additional paid in capital | 117,534 | 117,534 | ||||
Fair value of warrant discounted | $ 117,534 | $ 117,534 | ||||
Warrant exercised price | $ 1.25 | $ 1.25 | ||||
Allied [Member] | ||||||
Accretion | $ 124,831 | $ 169,248 |
Equity (Detail Narrative)
Equity (Detail Narrative) - USD ($) | Mar. 12, 2020 | Mar. 09, 2020 | Jul. 01, 2019 | May 20, 2020 | Mar. 06, 2020 | Jan. 31, 2020 | Dec. 02, 2019 | Aug. 31, 2019 | Jul. 10, 2019 | May 31, 2020 | Feb. 29, 2020 | May 31, 2020 | Dec. 01, 2019 | Sep. 10, 2019 | Aug. 29, 2019 | Jul. 25, 2019 | Jul. 02, 2019 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | ||||||||||||||
Preferred stock, shares par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||||
Common stock par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||
Cancellation of treasury stock | 10,459,220 | 10,459,220 | |||||||||||||||
common stock returned to treasury for re-issuance as consideration for acquisition of assets | 4,500,000 | ||||||||||||||||
Common stock issuable | 215,000 | 0 | 0 | ||||||||||||||
Proceeds from common stock | $ 150,000 | $ 250,000 | $ 200,000 | $ 300,000 | $ 32,250 | $ 0 | |||||||||||
Stock Issued During Period, Shares, New Issues | 240,000 | 130,000 | |||||||||||||||
Stock split shares description | 6.666 shares for each one | ||||||||||||||||
Par value amended description | the Company amended the articles of incorporation to change the par value of the authorized common stock and preferred stock from $0.001 to $0.0001. | ||||||||||||||||
Effective date | Aug. 7, 2019 | ||||||||||||||||
Price per share | $ 1.25 | $ 1.25 | $ 1.25 | $ 1.25 | $ 1.25 | $ 0.50 | |||||||||||
Authorized capital stock description | increasing the authorized capital stock of the Corporation from 75,000,000 to 300,000,000 shares of common stock | ||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 300,000 | $ 65,000 | $ 700,000 | $ 0 | |||||||||||||
finder fees as commission for sale of common stock | $ 24,000 | ||||||||||||||||
Common stock, shares issued | 120,000 | 200,000 | 160,000 | 240,000 | 93,228,000 | 83,930,780 | 83,930,780 | ||||||||||
Finder's fees [Member] | |||||||||||||||||
Common stock, shares issued | 56,000 | 16,000 |
Related party transactions an_3
Related party transactions and balances (Details) - USD ($) | 9 Months Ended | |
May 31, 2020 | May 31, 2019 | |
Related party transactions and balances | ||
Consulting fees and benefits | $ 437,341 | $ 143,647 |
Related party transactions an_4
Related party transactions and balances (Details 1) - USD ($) | May 31, 2020 | Aug. 31, 2019 |
Amounts due from related party (Note 8) | $ 20,596 | $ 23,517 |
1206217 BC Ltd Member | ||
Amounts due from related party (Note 8) | 0 | 1,105 |
Equilibrium Bio Canada Corp [Member] | ||
Amounts due from related party (Note 8) | 0 | 3,461 |
Inca Hemp Corp [Member] | ||
Amounts due from related party (Note 8) | 0 | 5,706 |
International Animal Care [Member] | ||
Amounts due from related party (Note 8) | 0 | 6,953 |
Tactical Relief LLC [Member] | ||
Amounts due from related party (Note 8) | 20,596 | 3,205 |
Tayrona Biosciences Inc [Member] | ||
Amounts due from related party (Note 8) | $ 0 | $ 3,087 |
Related party transactions an_5
Related party transactions and balances (Details Narrative) - USD ($) | 1 Months Ended | 9 Months Ended | ||
May 31, 2019 | May 31, 2020 | May 31, 2019 | Aug. 31, 2019 | |
Loan payable to Allied (Note 8) | $ 0 | $ 4,051,162 | ||
Lease expenses | $ 15,302 | 3,507 | $ 0 | |
Amounts due from related parties (Note 12 (b)) | 20,596 | 23,517 | ||
Due from related party written off | 17,929 | |||
Due to related party (Note 12 (b)) | 51,584 | 0 | ||
Shareholders [Member] | ||||
Due to related party (Note 12 (b)) | $ 51,584 | $ 0 |
Financial risk factors (Details
Financial risk factors (Details) - USD ($) | May 31, 2020 | Aug. 31, 2019 | May 31, 2019 | Sep. 09, 2018 |
Cash and cash equivalents | $ 39,384 | $ 1,080,882 | $ 220,856 | $ 0 |
Accounts receivable | 69,382 | $ 0 | ||
Canadian dollar exchange rate [Member] | ||||
Cash and cash equivalents | 0 | |||
Accounts receivable | 90,000 | |||
Accounts payable | (205,133) | |||
Net exposure | (115,133) | |||
Balance in US dollars | $ (95,713) |
Financial risk factors (Detai_2
Financial risk factors (Details 1) - Canadian dollar exchange rate [Member] | May 31, 2020USD ($) |
Cash and cash equivalents | $ 40,000,000 |
Accounts receivable | 21,992,228 |
Accounts payable | (2,166,127,248) |
Net exposure | (2,104,135,020) |
Balance in US dollars | $ (567,528) |
Financial risk factors (Detai_3
Financial risk factors (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | Aug. 31, 2019 | |
Net loss | $ (1,214,224) | $ (661,804) | $ (2,708,660) | $ (855,491) | |
Colombian Peso exchange rate [Member] | |||||
Net loss | (56,753) | $ 0 | |||
Canadian dollar exchange rate [Member] | |||||
Net loss | $ (9,571) | $ (92,226) |
Commitments (Details Narrative)
Commitments (Details Narrative) | Jun. 03, 2020USD ($) | May 07, 2020CAD ($) | May 29, 2020USD ($) | Jan. 31, 2020USD ($) | Dec. 02, 2019USD ($) | May 31, 2019CAD ($)shares | May 31, 2020USD ($)shares | Feb. 29, 2020USD ($) | May 31, 2019USD ($) | May 31, 2020USD ($)shares | May 31, 2020CAD ($) | May 31, 2019USD ($) | May 31, 2020CAD ($)shares | May 20, 2020shares | Mar. 12, 2020shares | Mar. 09, 2020shares | Mar. 06, 2020shares | Sep. 30, 2019USD ($) | Aug. 31, 2019USD ($)shares | Aug. 31, 2019CAD ($)shares | Aug. 30, 2019CAD ($) |
Common share issued | shares | 83,930,780 | 83,930,780 | 83,930,780 | 160,000 | 120,000 | 200,000 | 240,000 | 93,228,000 | 93,228,000 | ||||||||||||
Common stock share issued value | $ 300,000 | $ 65,000 | $ 700,000 | $ 0 | |||||||||||||||||
Consulting Services | 262,152 | $ 401,203 | $ 753,666 | $ 493,059 | |||||||||||||||||
Due to related party | 51,584 | 51,584 | $ 0 | ||||||||||||||||||
Annual rent for lease | 9,884 | $ 10,944 | 18,824 | $ 38,040 | |||||||||||||||||
Common Shares Issued One [Member] | |||||||||||||||||||||
Advances to related party | 101,728 | $ 101,728 | 0 | ||||||||||||||||||
Ownership percentage | 50.00% | ||||||||||||||||||||
Fund provided by the company | $ 100,000 | ||||||||||||||||||||
Lot 2 [Member] | |||||||||||||||||||||
Commitment | $ 953,700 | ||||||||||||||||||||
Initial refundable deposit | $ 10,000 | ||||||||||||||||||||
Lot 1 [Member] | |||||||||||||||||||||
Commitment | 988,550 | ||||||||||||||||||||
Annual rent for lease | $ 70,442 | ||||||||||||||||||||
Acquisition of Activated Nano [Member] | |||||||||||||||||||||
Business acquisiton of manufacturing machines, Description | Pursuant to the agreement the Company will acquire the equipment in exchange for CAD$125,000 and 250,000 common shares. The Company also agreed to pay the vendor a royalty equal to CAD$0.01 per milligram of product produced by the equipment for three years following the effective date. The maximum royalty payable is CAD$250,000 and the Company can prepay the CAD$250,000 maximum royalty at any time. | Pursuant to the agreement the Company will acquire the equipment in exchange for CAD$125,000 and 250,000 common shares. The Company also agreed to pay the vendor a royalty equal to CAD$0.01 per milligram of product produced by the equipment for three years following the effective date. The maximum royalty payable is CAD$250,000 and the Company can prepay the CAD$250,000 maximum royalty at any time. | |||||||||||||||||||
Deposits and advances | $ 36,151 | $ 36,151 | 0 | ||||||||||||||||||
Common share issued | shares | 250,000 | 250,000 | 250,000 | ||||||||||||||||||
Common stock share issued value | $ 37,500 | ||||||||||||||||||||
Payment for acquisition | 10,000 | ||||||||||||||||||||
Financing Agreement [Member] | |||||||||||||||||||||
Funds proceed | $ 1,253,772 | ||||||||||||||||||||
Interest monthly | $ 37,613 | ||||||||||||||||||||
Funds payable | $ 71,023 | $ 71,023 | |||||||||||||||||||
Research And Consultancy Agreement [Member] | |||||||||||||||||||||
Research expenses | $ 221,000 | ||||||||||||||||||||
Payment upfront of agreement | $ 83,000 | ||||||||||||||||||||
Consulting Agreement [Member] | |||||||||||||||||||||
Consulting Services | $ 210,000 | ||||||||||||||||||||
Common stock shares issued for service | shares | 215,000 | ||||||||||||||||||||
Due to related party | 69,367 | 69,367 | |||||||||||||||||||
Monthly payment for service | $ 30,000 | ||||||||||||||||||||
Purchase Agreements [Member] | |||||||||||||||||||||
Commitment | $ 1,942,250 | ||||||||||||||||||||
Advances to related party | 0 | ||||||||||||||||||||
Sales Agreement [Member] | |||||||||||||||||||||
Deposits and advances | $ 233,496 | $ 233,496 | $ 0 | ||||||||||||||||||
Monthly installment duration, description | September 1, 2019 and will continue to February 2020 | September 1, 2019 and will continue to February 2020 | |||||||||||||||||||
Equipment | $ 658,260 |
Share purchase warrants (Detail
Share purchase warrants (Details) - Warrant [Member] | 9 Months Ended |
May 31, 2020$ / sharesshares | |
Number of warrants | |
Beginning balance | shares | |
Number of warrants, issued | shares | 240,000 |
Ending balance | shares | 240,000 |
Weighted average exercise price | |
Beginning balance | $ / shares | |
Weighted average exercise price, issued | $ / shares | 1.25 |
Ending balance | $ / shares | $ 1.25 |
Share purchase warrants (Deta_2
Share purchase warrants (Details 1) - Warrant [Member] | May 31, 2020$ / sharesshares |
Number of warrants | shares | 240,000 |
Weighted average exercise price | $ / shares | $ 1.25 |
Expiry date | Jan. 23, 2021 |
Non-cash activities (Details)
Non-cash activities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Feb. 29, 2020 | May 31, 2020 | May 31, 2019 | |
Common stock issued pursuant to asset acquisitions | $ 4,500,000 | ||
Beneficial conversion feature | $ 129,533 | ||
Non-Cash Activities [Member] | |||
Common stock issued pursuant to asset acquisitions | 4,500,000 | $ 113,351 | |
Beneficial conversion feature | 129,533 | ||
Relative fair value of warrants issued with convertible note | 117,534 | ||
Original debt discount against convertible notes | 12,000 | ||
Net liabilities acquired in Medicolombias Acquisition | $ (301,328) |
Segment information (Details)
Segment information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
May 31, 2020 | May 31, 2019 | May 31, 2020 | May 31, 2019 | Aug. 31, 2019 | |
Net Sales | $ 0 | $ 0 | |||
Net loss | (1,214,224) | $ (661,804) | (2,708,660) | $ (855,491) | |
Accretion | 130,371 | $ 0 | 174,788 | $ 0 | |
Depreciation and amortization | 263,885 | 297,865 | |||
Total Assets | 9,537,775 | 9,537,775 | $ 4,382,302 | ||
Allied [Member] | |||||
Net Sales | 0 | 0 | |||
Net loss | (787,737) | (2,222,918) | |||
Accretion | 124,831 | 169,248 | |||
Depreciation and amortization | 0 | 0 | |||
Total Assets | 3,616,770 | 3,616,770 | |||
Medicolombia [Member] | |||||
Net Sales | 0 | 0 | |||
Net loss | (426,487) | (485,742) | |||
Accretion | 5,540 | 5,540 | |||
Depreciation and amortization | 263,885 | 297,865 | |||
Total Assets | $ 5,921,005 | $ 5,921,005 |
Segment information (Details 1)
Segment information (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | |
May 31, 2020 | May 31, 2020 | Aug. 31, 2019 | |
Total assets | $ 9,537,775 | $ 9,537,775 | $ 4,382,302 |
Revenue | 0 | 0 | |
Colombia [Member] | |||
Total assets | 5,921,005 | 5,921,005 | |
Revenue | 0 | 0 | |
Canada [Member] | |||
Total assets | 3,616,770 | 3,616,770 | |
Revenue | $ 0 | $ 0 |
Subsequent events (Details Narr
Subsequent events (Details Narrative) | Jun. 08, 2020USD ($)$ / sharesshares | Nov. 20, 2020USD ($) | Jul. 31, 2020shares | Jun. 30, 2020USD ($) | May 29, 2020USD ($) | May 31, 2020USD ($)$ / shares | May 31, 2019USD ($) | May 31, 2020USD ($)$ / sharesshares | May 31, 2020CAD ($)shares | May 31, 2019USD ($) | May 20, 2020$ / shares | Mar. 12, 2020$ / shares | Mar. 09, 2020$ / shares | Mar. 06, 2020$ / shares | Jan. 31, 2020$ / shares | Dec. 01, 2019$ / shares |
Shares issued, price per share | $ / shares | $ 1.25 | $ 1.25 | $ 1.25 | $ 1.25 | $ 1.25 | $ 0.50 | ||||||||||
Proceeds from issuance of common stock | $ 1,176,000 | $ 671,052 | ||||||||||||||
Shares issued | shares | 27,068,766 | 27,068,766 | ||||||||||||||
Lease rental expenses | $ 9,884 | $ 10,944 | $ 18,824 | $ 38,040 | ||||||||||||
Subsequent Event [Member] | ||||||||||||||||
Lease term | 10 years | 10 years | ||||||||||||||
Shares issued, price per share | $ / shares | $ 1.25 | |||||||||||||||
Proceeds from issuance of common stock | $ 1,200,000 | |||||||||||||||
Shares issued | shares | 960,000 | |||||||||||||||
Expiry date of lease term | May 31, 2030 | May 31, 2030 | ||||||||||||||
Lease rental expenses | $ 5,870 | |||||||||||||||
Purchsae price of land | $ 0 | $ 1,200,000 | ||||||||||||||
Subsequent Event [Member] | Finance Agreement[Member] | ||||||||||||||||
Initial payment | $ 71,023 | |||||||||||||||
Finance purchase price | $ 1,253,772 | |||||||||||||||
Monthly interest payment | $ 37,613 | |||||||||||||||
Repay principal amount | $ 1,253,772 | |||||||||||||||
Common shares issued | shares | 16,000 | |||||||||||||||
Warrant issued to purchase common shares | shares | 320,000 | |||||||||||||||
Interest rate | 5.00% | |||||||||||||||
Warrants exercised price | $ / shares | $ 1.25 |