Cover
Cover - shares | 3 Months Ended | |
Nov. 30, 2021 | Jan. 18, 2022 | |
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 | Nov. 30, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Entity Common Stock Shares Outstanding | 91,666,131 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-56002 | |
Entity Incorporation State Country Code | NV | |
Entity Tax Identification Number | 33-1227173 | |
Entity Address Address Line 1 | 1405 St. Paul St. | |
Entity Address Address Line 2 | Suite 201 | |
Entity Address City Or Town | Kelowna | |
Entity Address State Or Province | BC | |
Entity Address Country | CA | |
Entity Address Postal Zip Code | V1Y 9N2 | |
City Area Code | 877 | |
Local Phone Number | 255-4337 | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Interim
Condensed Consolidated Interim Balance Sheets - USD ($) | Nov. 30, 2021 | Aug. 31, 2021 |
Condensed Consolidated Interim Balance Sheets | ||
Cash | $ 275,529 | $ 419,825 |
Inventory (Note 3) | 155,481 | 136,261 |
Other receivables | 34,522 | 82,837 |
Prepaid expenses | 209,433 | 277,529 |
Total current assets | 674,965 | 916,452 |
Deposits and advances (Note 4) | 3,233,720 | 3,156,163 |
Right-of-use assets (Note 7) | 227,780 | 247,325 |
Property, plant and equipment (Note 5) | 665,119 | 267,835 |
Intangible assets (Note 6) | 46,000 | 46,000 |
Total assets | 4,847,584 | 4,633,775 |
Current liabilities | ||
Accounts payable and accrued liabilities | 1,605,420 | 1,871,659 |
Current portion of lease liabilities (Note 7) | 24,495 | 25,013 |
Loan payable (Note 8) | 1,253,772 | 1,596,522 |
Secured convertible notes payable (Note 9) | 2,020,526 | 1,889,050 |
Total current liabilities | 4,904,213 | 5,382,244 |
Lease liabilities, net of current portion (Note 7) | 203,285 | 222,312 |
Total liabilities | 5,107,498 | 5,604,556 |
Stockholders' 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; 91,666,131 shares issued and outstanding (79,858,867 - par value $0.0001 - August 31, 2021) | 9,167 | 7,986 |
Treasury stock | 0 | 707 |
Additional paid in capital | 29,884,062 | 18,099,226 |
Common stock issuable | 224,664 | 929,985 |
Common stock subscription receivable | (250,000) | 0 |
Accumulated deficit | (29,461,893) | (19,393,812) |
Accumulated other comprehensive loss | (665,914) | (614,873) |
Total stockholders' deficiency | (259,914) | (970,781) |
Total liabilities and stockholders' equity | $ 4,847,584 | $ 4,633,775 |
Condensed Consolidated Interi_2
Condensed Consolidated Interim Balance Sheets (Parenthetical) - $ / shares | Nov. 30, 2021 | Aug. 31, 2021 |
Stockholders' equity (deficit) | ||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares par value | $ 0.0001 | $ 0.0001 |
Common stock, shares issued | 91,666,131 | 79,858,867 |
Common stock, shares outstanding | 91,666,131 | 79,858,867 |
Condensed Consolidated Interi_3
Condensed Consolidated Interim Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | |
Nov. 30, 2021 | Nov. 30, 2020 | |
Revenues | ||
Sales | $ 10,082 | $ 4,200 |
Expenses | ||
Amortization | 13,299 | 169,680 |
Purchase of inventory | 1,182 | 0 |
Consulting fees | 301,002 | 327,843 |
Stock-based compensation - consulting services | 3,531,266 | 0 |
Stock-based compensation - bonus shares (Note 11) | 585,425 | 0 |
Stock-based compensation - options | 531,255 | 0 |
Foreign exchange loss (gain) | 143 | (4,965) |
Interest expense and bank charges | 171,141 | 112,840 |
Office and miscellaneous | 302,290 | 126,644 |
Professional fees | 243,788 | 130,631 |
Travel | 12,700 | 1,341 |
Inventory costs write-down to net realizable value (Note 3) | 252,639 | 0 |
Expenses before other items | 9,946,130 | 864,014 |
Loss before other items | (9,936,048) | (859,814) |
Loss on termination of lease | 0 | (65,565) |
Settlement payments (Note 14) | (105,000) | |
Loss on extinguishment of convertible debt | 0 | (110,000) |
Accretion | (132,033) | (55,483) |
Total other expenses | (132,033) | (336,048) |
Net loss | (10,068,081) | (1,195,862) |
Other comprehensive income (loss) | ||
Foreign currency translation adjustments | (51,041) | 118,923 |
Comprehensive loss | $ (10,119,122) | $ (1,076,939) |
Basic and diluted loss per share | $ (0.11) | $ (0.01) |
Weighted average number of common shares outstanding | 88,784,911 | 85,163,802 |
Condensed Consolidated Interi_4
Condensed Consolidated Interim Statements of Stockholders Equity (Deficit) (Unaudited) - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Stock Issuable [Member] | Stock subscription receivable [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (loss) [Member] | Treasury Stock [Member] |
Balance, shares at Aug. 31, 2020 | 85,105,780 | |||||||
Balance, amount at Aug. 31, 2020 | $ 3,704,164 | $ 8,511 | $ 12,226,382 | $ 19,952 | $ 0 | $ (7,908,566) | $ 642,115 | |
Shares issued for cash, shares | 200,000 | |||||||
Shares issued for cash, amount | 250,000 | $ 20 | 249,980 | 0 | 0 | 0 | 0 | |
Detachable warrants issued with convertible notes payable | 153,764 | 0 | 153,764 | 0 | 0 | 0 | 0 | |
Shares issuable upon modification of debt | 133,127 | 0 | 133,127 | 0 | 0 | 0 | 0 | |
Common stock subscribed | 110,000 | 0 | 0 | 110,000 | 0 | 0 | 0 | |
Comprehensive loss for the period | (1,076,939) | $ 0 | 0 | 0 | 0 | (1,195,862) | 118,923 | |
Balance, shares at Nov. 30, 2020 | 85,305,780 | |||||||
Balance, amount at Nov. 30, 2020 | 3,274,116 | $ 8,531 | 12,763,253 | 129,952 | 0 | (9,104,428) | (523,192) | |
Balance, shares at Aug. 31, 2021 | 79,858,867 | 7,073,170 | ||||||
Balance, amount at Aug. 31, 2021 | (970,781) | $ 7,986 | 18,099,226 | 929,985 | 0 | (19,393,812) | (614,873) | $ 707 |
Shares issued for cash, shares | 4,458,094 | |||||||
Shares issued for cash, amount | 2,303,105 | $ 446 | 3,343,126 | (790,467) | (250,000) | 0 | 0 | $ 0 |
Detachable warrants issued with convertible notes payable | 120,310 | 120,310 | 0 | |||||
Comprehensive loss for the period | (10,119,122) | (10,068,081) | (51,041) | |||||
Shares issued from treasury, shares | 7,073,170 | (7,073,170) | ||||||
Shares issued from treasury, amount | 7,957,316 | $ 707 | 7,957,316 | 0 | 0 | 0 | 0 | $ (707) |
Share issuance costs | (253,390) | $ 0 | (253,390) | 0 | 0 | 0 | 0 | 0 |
Shares subscribed | 85,146 | 85,146 | ||||||
Shares issued for finders fees, shares | 8,000 | |||||||
Shares issued for finders fees, amount | 6,000 | $ 1 | 5,999 | 0 | 0 | $ 0 | ||
Shares issued in error not yet cancelled, shares | 268,000 | |||||||
Shares issued in error not yet cancelled, amount | $ 27 | (27) | ||||||
Beneficial conversion feature | 80,247 | 80,247 | ||||||
Stock-based compensation | 531,255 | 531,255 | ||||||
Balance, shares at Nov. 30, 2021 | 91,666,131 | |||||||
Balance, amount at Nov. 30, 2021 | $ (259,914) | $ 9,167 | $ 29,884,062 | $ 224,664 | $ (250,000) | $ (29,461,893) | $ (665,914) |
Condensed Consolidated Interi_5
Condensed Consolidated Interim Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Nov. 30, 2021 | Nov. 30, 2020 | |
Operating activities | ||
Net loss for the period | $ (10,068,081) | $ (1,195,862) |
Adjustment to net loss for the period for non-cash items | ||
Accretion | 132,033 | 55,483 |
Accrued interest | 36,732 | 0 |
Inventory write-down to net realizable value | 252,639 | 0 |
Amortization | 13,299 | 169,680 |
Loss on debt extinguishment | 0 | 110,000 |
Loss on termination of lease | 0 | 65,566 |
Stock-based compensation - consulting services | 3,531,266 | 0 |
Stock-based compensation - bonus shares (Note 11) | 585,425 | 0 |
Stock-based compensation - options | 531,255 | 0 |
Changes in non-cash working capital balance: | ||
Decrease in other receivables | 48,315 | 0 |
Decrease (increase) in prepaid expenses | (102,998) | 41,921 |
Increase in due from related parties | 0 | (11,726) |
Increase (decrease) in accounts payable and accrued liabilities | (403,979) | 78,679 |
Increase in inventory | (271,859) | (7,901) |
Net cash used in Operating Activities | (1,715,953) | (694,160) |
Investing activities | ||
Refunds of deposits | 0 | 129,897 |
Purchase of property, plant, and equipment | (375,413) | (21,932) |
Net cash used in Invesing activities | (375,413) | 107,965 |
Financing activities | ||
Proceeds of convertible notes payable | 200,000 | 286,892 |
Repayment of loan payable | (342,750) | 0 |
Repayment of finance lease obligations | 0 | (12,480) |
Proceeds from the issuance of common stock | 2,140,861 | 250,000 |
Net cash used in financing activities | 1,998,111 | 524,412 |
Decrease in cash | (93,255) | (61,783) |
Effect of exchange rate on changes of cash | (51,041) | (20,869) |
Cash, beginning of period | 419,825 | 94,047 |
Cash, end of period | 275,529 | 11,395 |
Supplemental cash flow disclosures: | ||
Income taxes paid | 0 | 0 |
Interest paid | $ 147,839 | $ 112,840 |
Nature of operations reverse ta
Nature of operations reverse takeover transaction and going concern | 3 Months Ended |
Nov. 30, 2021 | |
Nature of operations reverse takeover transaction and going concern | |
1. Nature of operations, reverse take-over transaction and going concern | 1. Nature of operations, reverse take-over transaction and going concern a) Nature of operations Allied Corp. (the “Company or Allied”) was incorporated in the State of Nevada on February 3, 2013. On July 1, 2019, the Company changed its name to Allied Corp. The head office and the registered office of the Company are located at 1405 St. Paul Street, Kelowna BC V1Y 2E4. 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 such operations nor obtained the required permits to begin such operations. On September 10, 2019, the Company was acquired in a reverse takeover (“RTO”) transaction (see Note 1b) and the RTO is considered a purchase of the Company’s net assets 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 from the date of incorporation on September 13, 2018. On February 18, 2020, the Company acquired all the issued and outstanding share capital of a Colombian company, Allied Colombia S.A.S (“Allied Colombia”). The assets, liabilities and results of Allied Colombia are consolidated in these financial statements beginning from the February 18, 2020 acquisition date. As at November 30, 2021, Allied Colombia has a licensed cannabis farm in Colombia. 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 51,200,014shares of common stock, representing approximately 65.42% 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 as a consideration to acquire 100% of the issued and outstanding equity of AM Biosciences. Further, as part of the transaction, the Allied Shareholder submitted for cancellation and return to treasury 10,459,220 and 4,500,000 shares of common stock. As a consequence, immediately subsequent to the close of the Reorganization Agreement, Allied had 78,268,780 shares of common stock outstanding. The Reorganization Agreement constitutes a reverse acquisition, such that AM Biosciences acquired control of Allied Corp. At the time of the Reorganization Agreement, the operations of Allied Corp. did not constitute businesses under ASC 805 Business Combinations c) Going concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company incurred a net loss for the three months ended November 30, 2021 of $10,068,081, has generated minimal revenue and as at November 30, 2021 has a working capital deficit of $4,229,248. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The consolidated 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) COVID-19 impact In March 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak and the related adverse public health developments have adversely affected workforces, economies, and financial markets globally, leading to uncertainty and an economic downturn. Although some product distribution was delayed by COVID-19, management has determined that there has been no significant impact to the Company’s operations, however management continues to monitor the situation. e) 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, only if and when cannabis operations are federally legalized. On January 4, 2018, the then 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. Since that time, United States district attorneys have taken no legal action against state law compliant entities, and the Biden administration is generally anticipated to seek federal decriminalization of state legal cannabis activity. 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 the United States through institutions which are not regulated by the United States federal government, in Canada, and in many other countries in order to support continuing operations. |
Significant accounting policies
Significant accounting policies | 3 Months Ended |
Nov. 30, 2021 | |
Significant accounting policies | |
2. Significant accounting policies | 2. Significant accounting policies Business Presentation These unaudited condensed consolidated 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 interim unaudited 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 for complete financial statements. Therefore, these interim financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended August 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC. The consolidated 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 November 30, 2021, and the results of its operations for the three months ended November 30, 2021, and cash flows for the three months ended November 30, 2021. The results of operations for the period ended November 30, 2021 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 consolidated financial statements include accounts of Allied Corp. and its wholly-owned subsidiaries, including AM Biosciences, Allied US Products LLC, Tactical Relief LLC, Baleno Ltd. and Allied Colombia. 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 three months when acquired. The Company did not have any cash equivalents as of November 30, 2021 and August 31, 2021. c) Property, plant and equipment Property, plant and equipment are stated at cost. The Company depreciates the cost of property, plant and equipment over their estimated useful lives at the following annual rates and methods: Farm facility and equipment 1 - 10 years straight-line basis Office and computer equipment 5 - 10 years straight-line basis Land equipment 10 years straight-line basis d) Inventory Inventory is comprised of raw materials, supplies, vegetative and flowering plants, dried flower, diluted crude and CBD isolates available for sale, and purchased cannabis products. Inventory is stated at the lower of cost or net realizable value, determined using weighted average cost. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. At the end of each reporting period, the Company performs an assessment of inventory and records write-downs for excess and obsolete inventories based on the Company’s estimated forecast of product demand, production requirements, market conditions, regulatory environment, and spoilage. Actual inventory losses may differ from management’s estimates and such differences could be material to the Company’s consolidated balance sheets, statements of net loss and comprehensive loss and statements of cash flows. e) Intangible assets Intangible assets include licenses which are being amortized over their estimated useful lives of 10 years. The Company’s licenses are amortized over their economic or legal life on a straight-line basis, whichever is shorter. 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 g) Foreign currency translation and functional currency conversion Items included in these consolidated 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. The change in functional currency was accounted for prospectively from September 10, 2019 and prior period financial statements 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 transactions. 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 Allied Colombia to be the Colombian peso. The functional currency for all other subsidiaries is the U.S. dollar. 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) Revenue recognition The Company’s revenue is comprised of sales of cannabis products. The Company’s revenue-generating activities have a single performance obligation and revenue is recognized at the point in time when control of the product transfers and the Company’s obligations have been fulfilled. This generally occurs when the product is shipped or delivered to the customer, depending upon the method of distribution and shipping terms set forth in the customer contract. Revenue is measured as the amount of consideration the Company expects to receive in exchange for the sale of the Company’s product. Certain of the Company’s customer contracts may provide the customer with a right of return. In certain circumstances the Company may also provide a retrospective price adjustment to a customer. These items give rise to variable consideration, which is recognized as a reduction of the transaction price based upon the expected amounts of the product returns and price adjustments at the time revenue for the corresponding product sale is recognized. The determination of the reduction of the transaction price for variable consideration requires that the Company make certain estimates and assumptions that affect the timing and amounts of revenue recognized. Sales of products are for cash or otherwise agreed-upon credit terms. The Company’s payment terms vary by location and customer; however, the time period between when revenue is recognized and when payment is due is not significant. The Company estimates and reserves for its bad debt exposure based on its experience with past due accounts and collectability, write-off history, the aging of accounts receivable and an analysis of customer data. k) Net income (loss) per common share Net income (loss) per share is calculated in accordance with ASC 260, Earnings per Share Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding. l) Income taxes The Company accounts for income taxes under ASC 740, Income Taxes m) 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. n) 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. o) Financial instruments ASC 825, Financial Instruments 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, due from related parties, accounts payable, note payable, and convertible notes 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. For certain of the Company’s financial instruments, including accounts payable, due from related parties, notes and loans payable, the carrying amounts approximate their fair values due to the short maturities. The Company does not have any assets or liabilities measured at fair value on a recurring basis presented on the Company’s balance sheet as of November 30, 2021 and August 31, 2021 other than cash. 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. p) Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “ Leases (Topic 842) 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 7 – Leases. q) 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 fair value of the equity interests of the other combining entity or entities, where the acquirer usually is the combining entity whose relative size (measured in, for example, assets, revenues, or earnings) is significantly larger than that of the other combining entity or entities. 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 acquire for accounting purposes (the accounting acquiree); and (b) the private entity as the acquirer for accounting purposes (the accounting acquirer). 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 of the consideration transferred by the accounting acquirer for its interest in the accounting acquiree is based on the number of equity interests the legal subsidiary would have had to issue to give the owners of the legal parent the same percentage equity interest in the combined entity that results from the reverse acquisition. The fair value of the number of equity interests calculated in that way can be used as the fair value of consideration transferred in exchange for the acquiree. The assets and liabilities of the legal acquiree are measured and recognized in the consolidated financial statements at their pre-combination carrying amounts (see ASC 805-40-45-2(a)). Presentation of consolidated financial statements post reverse acquisition Pursuant to ASC 805-40-45-1 and 45-2, 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 consolidated financial statements also is retroactively adjusted to reflect the legal capital of the legal parent (accounting acquiree). The 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”; (c) the retained earnings and other equity balances of the legal subsidiary (accounting acquirer) before the business combination; (d) the amount recognized as issued equity interests in the consolidated financial statements determined by adding the issued equity interest of the legal subsidiary (the accounting acquirer) outstanding immediately before the business combination to the fair value of the legal parent (accounting acquiree) determined in accordance with the guidance in this topic applicable to business combinations. However, the equity structure (that is, the number and type of equity interests issued) reflects the equity structure of the legal parent (the accounting acquiree), including the equity interests the legal parent issued to effect the combination. 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 acquisition 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 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 acquire 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 Allied Colombia (from the date of acquisition, February 18, 2020). All intercompany balances and transactions have been eliminated upon consolidation. r) Recent accounting pronouncements The Company does not expect that recent accounting pronouncements or changes in accounting pronouncements during the three months ended November 30, 2021, are of significance or potential significance to the Company. |
Inventory
Inventory | 3 Months Ended |
Nov. 30, 2021 | |
Inventory | |
3. Inventory | 3. Inventory Inventory is comprised of the following items: November 30, 2021 August 31, 2021 Work in progress $ 37,425 $ 51,831 Finished goods 118,056 84,430 Total inventory $ 155,481 $ 136,261 The costs of inventory include but are not limited to labor, utilities, nutrition and irrigation, overhead and the depreciation of manufacturing equipment and production facilities, and amortization of licenses determined at normal capacity. Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance and rent of grow facility. The Company began productions in Colombia in late 2020, when the Company obtained approval for its strains of products. During the current period, certain costs were determined based on the actual usage of production space as compared to the normal predetermined operational production of the facility based on capacity as the Company gradually started to grow products and prepared the facility ready. Management determined that during the current period, the Company was operating at 24% of predesigned capacity and as a result 24% of rent, amortization expenses, and certain overhead costs are included in costs of inventory. During the current period, the Company recorded a write-down of inventory costs which include labor, utilities, nutrition, and irrigation, overhead and depreciation to net realizable value of $252,639. The Company’s sales were generated from cannabis products purchased from certain third-party supplier during the three month periods ended November 30, 2021 and November 30, 2020. |
Deposits and advances
Deposits and advances | 3 Months Ended |
Nov. 30, 2021 | |
Deposits and advances | |
4. Deposits and advances | 4. Deposits and advances November 30, 2021 August 31, 2021 a) Towards the purchase of prefabricated buildings $ 2,656,695 $ 2,656,695 b) Vitalis equipment deposit 233,496 233,496 c) Deposit towards a license acquisition 150,000 150,000 d) Prepayments for construction facility in Colombia 77,829 115,972 e) Eteros equipment deposit 115,700 - Total deposits and advances $ 3,233,720 $ 3,156,163 a) In 2019, the Company 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. At November 30, 2021, Company had deposits of $2,656,695 (August 31, 2021 - $2,656,695) to purchase prefabricated buildings. As of November 30, 2021, the Company had not yet received the buildings and the amounts have been recorded as deposits. b) At November 30, 2021 and August 31, 2021, the Company had paid $233,496 to purchase equipment as described in Note 14(c). At November 30, 2021, the Company had not yet received the equipment and the amount paid has been recorded as a deposit. c) At November 30, 2021 and August 31, 2021, the Company had paid $150,000 to acquire a license through an asset purchase agreement as described in Note 19(a). At November 30, 2021, the asset purchase has not closed and the amount paid has been recorded as a deposit. d) The Company paid certain vendors for the construction of farm facilities in Colombia in advance. As at November 30, 2021, the prepayments totaled $77,829. e) At November 30, 2021, the Company had paid $115,700 to purchase equipment. At November 30, 2021, 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 | 3 Months Ended |
Nov. 30, 2021 | |
Property plant and equipment | |
5. Property plant and equipment | 5. Property, plant and equipment At November 30, 2021, property, plant and equipment (“PPE”) consisted of: Construction in process Farm facility and equipment Office and computer equipment Land equipment Total August 31, 2021 $ 27,469 $ 274,776 $ 10,653 $ 16,310 $ 329,208 Additions 334,383 93,657 5,815 9,329 443,184 Foreign exchange (15,143 ) (19,329 ) (838 ) (1,300 ) (36,610 ) November 30, 2021 $ 346,709 $ 349,104 $ 15,629 $ 24,339 $ 735,782 Accumulated depreciation August 31, 2021 $ - $ 58,519 $ 1,935 $ 919 $ 61,373 Additions - 12,374 490 435 13,299 Foreign exchange - (3,810 ) (130 ) (69 ) (4,009 ) November 30, 2021 $ - $ 67,083 $ 2,295 $ 1,285 $ 70,663 Net book value August 31, 2021 $ 27,469 $ 216,257 $ 8,718 $ 15,391 $ 267,835 November 30, 2021 $ 346,709 $ 282,021 $ 13,335 $ 23,054 $ 665,119 As of November 30, 2021 and August 31, 2021, the construction in process has not been in use. During the period ended November 30, 2021, the Company included depreciation of PPE of $9,100 in cost of inventory. |
Intangible assets
Intangible assets | 3 Months Ended |
Nov. 30, 2021 | |
Intangible assets | |
6. Intangible assets | 6. Intangible assets At November 30, 2021, intangible assets consisted of: Cost Foreign exchange $ Accumulated amortization Accumulated impairment November 30, 2021 Net carrying value August 31, 2021 Net carrying value Cannabis licenses 5,435,334 (464,973 ) (1,122,694 ) (3,801,667 ) 46,000 46,000 5,435,334 (464,973 ) (1,122,694 ) (3,801,667 ) 46,000 46,000 On February 17, 2020, the Company acquired $5,435,334 of licenses as part of the acquisition of Allied Colombia. 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 recorded amortization of these licenses of $658,836 for the year ended August 31, 2021, of which $158,121 was included in cost of inventory. Management acquired the licenses with a plan to operate in Colombia and believed the amounts paid for the licenses would be recovered from future operations. The Company has only recently started its operations in Colombia and has limited history on which to base future outcomes from operations including cash flows. Cannabis and hemp are considered to be an emerging industry and Colombia does not yet have a sufficiently established observable legal market in which the Company could sell its Cannabis or hemp flower and CBD or THC extracts. Laws and regulations in Colombia are evolving and there is uncertainty in what will be legally permissible in a future market and what prices and demand there would be in Colombia for the Company’s products. At the present, the Company’s export activities are regulated and restricted by Colombian law and it is uncertain whether future changes in law would favorably impact the Company’s operations. Due to the uncertainty in the timing and amount of future cash flows from operations the Company has written down its licenses to the estimated recoverable amount of $46,000. During the year ended August 31, 2021, the Company recorded impairment of intangible assets in the amount of $2,687,695. |
Leases
Leases | 3 Months Ended |
Nov. 30, 2021 | |
Leases | |
7. Leases | 7. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) The Company did not have any leases until the acquisition of Allied Colombia during the year ended August 31, 2020. The acquisition resulted in the addition of $82,398 of operating lease assets and liabilities. During the year ended August 31, 2021, the Company re-measured its lease liabilities under this lease as the criteria has met for additional monthly payment when the Company started production as outlined in the lease agreement, resulting in additional lease liabilities of $70,705. On August 10, 2021, the Company entered into another lease for additional land in Colombia with monthly payment of $2,647 (COP9,970,675) for 12.5 hectares which is intended for use of outdoor cultivation, resulting in addition of lease liabilities of $104,902. The lease is for 5 years, and expires in July 2026. The management has assessed the lease as an operating lease. The Company entered into an agreement to lease the land described in 14(a) with a commencement date of June 1, 2020. The lease requires the Company to make monthly payments of $4,501 (CAD$5,870) per month. 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 $920,000 (CAD$1,200,000). Effective November 1, 2020, the Company terminated the lease. Pursuant to ASC 842-20 upon the termination of the lease, the Company derecognized the lease related asset and liability and included any consideration paid or received upon termination that was not already included in the lease payments in the gain or loss on termination of the lease. After recording the proceeds from the landlord and derecognizing the capitalized building costs as well as the right of use asset and liability, the Company recorded a loss of $65,565 on the termination of the lease. 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 November 30, 2021, the Company did not have any finance leases. At November 30, 2021, the weighted average remaining operating lease term was 6.68 years and the weighted average discount rate associated with operating leases was 15%. The components of lease expenses were as follows: $ Operating lease cost: Amortization of right-of-use assets 5,810 Interest on lease liabilities 9,050 Total operating lease cost 14,860 The following table provides supplemental cash flow and other information related to leases for three months ended November 30, 2021: $ Lease payments 14,860 Supplemental balance sheet information related to leases as of November 30, 2021 are as below: $ Cost 282,273 Accumulated amortization (13,240 ) Foreign exchange (41,253 ) Net carrying value at November 30, 2021 227,780 Future minimum lease payments related to lease obligations are as follows: $ 2022 42,767 2023 57,023 2024 57,023 Thereafter 206,234 Total minimum lease payments 363,047 Less: amount of lease payments representing effects of discounting (135,267 ) Present value of future minimum lease payments 227,780 Less: current obligations under leases (24,495 ) Lease liabilities, net of current portion 203,285 |
Loans payable
Loans payable | 3 Months Ended |
Nov. 30, 2021 | |
Loans payable | |
8. Loans payable | 8. Loans payable a) In June 2020, the Company entered into a financing agreement to finance the buildings described in Note 4(a). Pursuant to the agreement, the Company financed $1,253,772 of the purchase price. The Company paid $71,023 at commencement date on May 29, 2020, and would make six monthly interest payments of $37,613 commencing June 20, 2020 and repay the principal of $1,253,772 on November 20, 2020. The loan was extended after the initial maturity date. During the three months ended November 30, 2021, the Company further amended the loan agreement to extend the repayment due date to December 20, 2021. During the three months ended November 30, 2021, the Company paid interest in the amount of $112,839 (2020 - $112,840). Subsequent to November 30, 2021, the Company amended the financing agreement as described in Note 19(e)). b) On January 24, 2021, the Company entered into an acquisition agreement to acquire all common shares of Pacific Sun Fungi Inc. (“PSF”) in consideration for the issuance of a promissory note of $85,500 and 200,000 common shares of the Company with a fair value of $74,000. The note is non-interest bearing and is due 10 days after demand. During the three months ended November 30, 2021, the Company made the final $42,750 payment towards the promissory note. c) On March 1, 2021, the Company entered into a $300,000 promissory note with simple interest of 10% per annum and maturity date of June 1, 2021. As additional compensation the Company issued 100,000 shares of the Company with a fair value of $90,000, which was treated as discount on the promissory note. During the year ended August 31, 2021, the accretion on the promissory note totalled $90,000. During the three months ended November 30, 2021, the Company made the final payment of $315,000 which included interest payment of $15,000. |
Secured convertible notes payab
Secured convertible notes payable | 3 Months Ended |
Nov. 30, 2021 | |
Secured convertible notes payable | |
9. Secured convertible notes payable | 9. Secured convertible notes payable The Company has granted each and every of the secured convertible note holders a continuing security interest in, a general lien upon, and a right of set-off against all existing and future assets and property under the terms of a security agreement. a) On January 23, 2020, the Company issued two convertible notes with principal amounts of $400,000 and $200,000, respectively, with a 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 mature 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 relative fair values of the convertible notes 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 (“BCF”). The Company recognized the relative fair value of the BCF of $115,383 and an equivalent discount. The Company then recognized the relative fair value of the warrants of $108,100 as additional-paid-in capital and an equivalent discount that further reduced the carrying value of the convertible debt to $364,517. The beneficial conversion feature of $115,383, the original issue discount of $12,000 and the relative fair value of the warrants of $108,100discounted the carrying value of the convertible debt on the date of issue. The discount is being expensed over the term of the loan to increase the carrying value to the face value of the loan using effective interest rate method. On June 30, 2020, the Company repaid $200,000 of the $600,000 note which left $200,000 outstanding on each note. i. First Modification: On July 1, 2020, the Company entered into amendments to the convertible notes. Pursuant to the amendments, beginning on July 1, 2020, the convertible notes 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 note 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, 2021. Each note holder received 8,000 common shares and 160,000 warrants. The Company evaluated the transaction under the guidance found in ASC 470-50 Modification and Extinguishment The extended convertible notes had a total carrying value of $400,000. As the common shares and warrants were issued as consideration for extending the convertible notes, the fair value of the common share and warrants of $218,397 were expensed under extinguishment accounting. The fair value of these costs were included in the calculation of the loss on extinguishment of $220,065. ii. Second Modification: On November 1, 2020, the Company entered into amendments to the convertible notes. Pursuant to the amendments, the maturity date of the convertible notes was amended to due on demand on or before March 31, 2021. In consideration for extending the maturity date, the Company agreed to issue to the convertible note holders 100,000 common shares of the Company. Each note holder received 50,000 common shares. The Company evaluated the transaction under the guidance found in ASC 470-50 Modification and Extinguishment The extended convertible notes had a total carrying value of $400,000. As the common shares were issued as consideration for extending the convertible notes, the fair value of the common share of $110,000 were expensed under extinguishment accounting. The fair value of these costs were included in the calculation of the loss on extinguishment of $110,000. iii. Third Modification: On March 31, 2021, the Company entered into amendments to the convertible notes. Pursuant to the amendments, beginning on April 1, 2021, the convertible notes bear simple interest at 10% per annum. Pursuant to the amendments, the maturity date of the convertible notes was amended to due on demand on or before September 30, 2021. In consideration for extending the maturity date, the Company agreed to issue to the convertible note holders 20,000 common shares of the Company. Each note holder received 10,000 common shares. The Company evaluated the transaction under the guidance found in ASC 470-50 Modification and Extinguishment The extended convertible notes had a total carrying value of $400,000. As the common shares were issued as consideration for extending the convertible notes, the fair value of the common share of $20,000 were expensed under extinguishment accounting. The fair value of these costs were included in the calculation of the loss on extinguishment of $20,000. iv. Fourth Modification: On October 1, 2021, the Company entered into amendments to the convertible notes. Pursuant to the amendments, beginning on April 1, 2021, the convertible notes bear simple interest at 10% per annum. Pursuant to the amendments, the maturity date of the convertible notes was amended to due on demand on or after March 31, 2022 for no additional consideration. The Company evaluated the transaction under the guidance found in ASC 470-50 Modification and Extinguishment As the future undiscounted cash flows are greater than or equal to the net carrying value of the original debt, the carrying amount of the debt at the time of the restructuring was not changed and a new effective interest rate was calculated as the discount rate that equates the present value of the future cash payments specified by the new terms with the carrying amount of the debt. Interest expense will be recognized prospectively such that a constant effective interest rate is applied to the carrying amount of the debt at the beginning of each period between restructuring and maturity, consistent with the interest method. During the three months ended November 30, 2021, the Company made interest payments of 20,000. As at November 30, 2021, the Company has recorded accrued interest of $26,630, which is included in accounts payable and accrued liabilities on the consolidated balance sheets. b) On September 29, 2020, the Company issued a convertible note with a fair value of $163,341 (the “Note”) and warrants to purchase 130,673 shares of the Company’s common stock at $1.25 per share for 2 years. The Note bears interest at 10% per annum. The Note was due on demand after March 27, 2021. The Note was convertible into shares of the Company’s common stock at any time prior to March 27, 2021 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 November 30, 2021, the conversion features and warrants do not meet derivative classification. The relative fair values of the convertible note and the warrants were $85,330 and $78,011 respectively. The effective conversion price was then determined to be $0.65. 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 (“BCF”). The Company recognized the relative fair value of the BCF of $85,330 and an equivalent discount. The Company then recognized the relative fair value of the warrants of $78,011 as additional-paid-in capital and an equivalent discount that further reduced the carrying value of the convertible debt to $Nil. The discount is being expensed over the term of the loan to increase the carrying value to the face value of the loan using effective interest rate method. i. First Modification: On March 31, 2021, the Company entered into an amendment to the convertible note. Pursuant to the amendment, beginning on April 1, 2021, the convertible note bears simple interest at 10% per annum. The maturity date of the convertible note was amended to due on demand on or before September 30, 2021. In consideration for extending the maturity date, the Company issued to the convertible note holder 8,268 common shares of the Company. The Company evaluated the transaction under the guidance found in ASC 470-50 Modification and Extinguishment The extended convertible note had a total carrying value of $163,341. As the common shares were issued as consideration for extending the convertible note, the fair value of the common share of $8,268 were expensed under extinguishment accounting. The fair value of these costs were included in the calculation of the loss on extinguishment of $8,268. ii. Second Modification: On June 1, 2021, the Company entered into an amendment to the convertible note. Pursuant to the amendment, beginning on June 1, 2021, the note bears simple interest at 10% per annum. The maturity date of the convertible note was amended to due on demand on or before November 30, 2021 for no additional consideration. The Company evaluated the transaction under the guidance found in ASC 470-50 Modification and Extinguishment As the future undiscounted cash flows are greater than or equal to the net carrying value of the original debt, the carrying amount of the debt at the time of the restructuring was not changed and a new effective interest rate was calculated as the discount rate that equates the present value of the future cash payments specified by the new terms with the carrying amount of the debt. Interest expense will be recognized prospectively such that a constant effective interest rate is applied to the carrying amount of the debt at the beginning of each period between restructuring and maturity, consistent with the interest method. iii. Third Modification: On November 1, 2021, the Company entered into an amendment to the convertible note. Pursuant to the amendment, beginning on April 1, 2021, the note bears simple interest at 10% per annum. The maturity date of the convertible note was amended to due on demand on or before March 31, 2022 for no additional consideration. The Company evaluated the transaction under the guidance found in ASC 470-50 Modification and Extinguishment As the future undiscounted cash flows are greater than or equal to the net carrying value of the original debt, the carrying amount of the debt at the time of the restructuring was not changed and a new effective interest rate was calculated as the discount rate that equates the present value of the future cash payments specified by the new terms with the carrying amount of the debt. Interest expense will be recognized prospectively such that a constant effective interest rate is applied to the carrying amount of the debt at the beginning of each period between restructuring and maturity, consistent with the interest method. As at November 30, 2021, the Company has recorded accrued interest of $19,109, which is included in accounts payable and accrued liabilities on the consolidated balance sheets. c) On October 26, 2020, the Company issued a convertible note with a face value of $37,613 (the “Note”) and warrants to purchase 30,090 shares of the Company’s common stock at $1.25 per share for 2 years. The Note bears interest at 10% per annum. The Note was due on demand after April 23, 2021. The Note was convertible into shares of the Company’s common stock at any time prior to April 23, 2021 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 relative fair values of the convertible note and the warrants were $20,176 and $17,437 respectively. The effective conversion price was then determined to be $0.65. 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 (“BCF”). The Company recognized the relative fair value of the BCF of $20,176 and an equivalent discount. The Company then recognized the relative fair value of the warrants of $17,437 as additional-paid-in capital and an equivalent discount that further reduced the carrying value of the convertible debt to $Nil. The discount is being expensed over the term of the loan to increase the carrying value to the face value of the loan using effective interest rate method. i. First Modification: On June 1, 2021, the Company entered into an amendment to the convertible note. Pursuant to the amendment, beginning on June 1, 2021, the convertible note bears simple interest at 10% per annum. The maturity date of the convertible note was amended to due on demand on or before November 30, 2021 for no additional consideration The Company evaluated the transaction under the guidance found in ASC 470-50 Modification and Extinguishment As the future undiscounted cash flows are greater than or equal to the net carrying value of the original debt, the carrying amount of the debt at the time of the restructuring was not changed and a new effective interest rate was calculated as the discount rate that equates the present value of the future cash payments specified by the new terms with the carrying amount of the debt. Interest expense will be recognized prospectively such that a constant effective interest rate is applied to the carrying amount of the debt at the beginning of each period between restructuring and maturity, consistent with the interest method. ii. Second Modification: On November 1, 2021, the Company entered into an amendment to the convertible note. Pursuant to the amendment, beginning on April 1, 2021, the note bears simple interest at 10% per annum. The maturity date of the convertible note was amended to due on demand on or before March 31, 2022 for no additional consideration. The Company evaluated the transaction under the guidance found in ASC 470-50 Modification and Extinguishment As the future undiscounted cash flows are greater than or equal to the net carrying value of the original debt, the carrying amount of the debt at the time of the restructuring was not changed and a new effective interest rate was calculated as the discount rate that equates the present value of the future cash payments specified by the new terms with the carrying amount of the debt. Interest expense will be recognized prospectively such that a constant effective interest rate is applied to the carrying amount of the debt at the beginning of each period between restructuring and maturity, consistent with the interest method. As at November 30, 2021, the Company has recorded accrued interest of $4,122, which is included in accounts payable and accrued liabilities on the consolidated balance sheets. d) On November 11, 2020, the Company issued a convertible note with a face value of $85,937 (the “Note”) and warrants to purchase 68,750 shares of the Company’s common stock at $1.25 per share for 2 years. The Note bears interest at 10% per annum. The Note was due on demand after May 9, 2021. The Note was convertible into shares of the Company’s common stock at any time prior to April 23, 2021 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 relative fair values of the convertible note and the warrants were $48,258 and $37,679 respectively. The effective conversion price was then determined to be $0.70. 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 (“BCF”). The Company recognized the relative fair value of the BCF of $48,258 and an equivalent discount. The Company then recognized the relative fair value of the warrants of $37,679 as additional-paid-in capital and an equivalent discount that further reduced the carrying value of the convertible debt to $Nil. The discount is being expensed over the term of the loan to increase the carrying value to the face value of the loan using effective interest rate method. i. First Modification: On June 1, 2021, the Company entered into an amendment to the convertible note. Pursuant to the amendment, beginning on June 1, 2021, the note bears simple interest at 10% per annum. The maturity date of the convertible note was amended to due on demand on or before November 30, 2021 for no additional consideration. The Company evaluated the transaction under the guidance found in ASC 470-50 Modification and Extinguishment As the future undiscounted cash flows are greater than or equal to the net carrying value of the original debt, the carrying amount of the debt at the time of the restructuring was not changed and a new effective interest rate was calculated as the discount rate that equates the present value of the future cash payments specified by the new terms with the carrying amount of the debt. Interest expense will be recognized prospectively such that a constant effective interest rate is applied to the carrying amount of the debt at the beginning of each period between restructuring and maturity, consistent with the interest method. ii. Second Modification: On November 1, 2021, the Company entered into an amendment to the convertible note. Pursuant to the amendment, beginning on April 1, 2021, the note bears simple interest at 10% per annum. The maturity date of the convertible note was amended to due on demand on or before March 31, 2022 for no additional consideration. The Company evaluated the transaction under the guidance found in ASC 470-50 Modification and Extinguishment As the future undiscounted cash flows are greater than or equal to the net carrying value of the original debt, the carrying amount of the debt at the time of the restructuring was not changed and a new effective interest rate was calculated as the discount rate that equates the present value of the future cash payments specified by the new terms with the carrying amount of the debt. Interest expense will be recognized prospectively such that a constant effective interest rate is applied to the carrying amount of the debt at the beginning of each period between restructuring and maturity, consistent with the interest method. As at November 30, 2021, the Company has recorded accrued interest of $9,041, which is included in accounts payable and accrued liabilities on the consolidated balance sheets. e) On December 2, 2020, the Company issued a convertible note with a face value of $600,000 (the “Note”) and warrants to purchase 240,000 shares of the Company’s common stock at $1.25 per share for 2 years. The Note bears interest at 10% per annum. The Note was due on demand after November 27, 2021. The Note was convertible into shares of the Company’s common stock at any time prior to November 27, 2021 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 relative fair values of the convertible note and the warrants were $457,436 and $142,564 respectively. The effective conversion price was then determined to be $0.95. 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 (“BCF”). The Company recognized the relative fair value of the BCF of $457,436 and an equivalent discount. The Company then recognized the relative fair value of the warrants of $22,564 as additional-paid-in capital and an equivalent discount that further reduced the carrying value of the convertible debt to $Nil. The discount is being expensed over the term of the loan to increase the carrying value to the face value of the loan using effective interest rate method. Modification: On October 1, 2021, the Company entered into an amendment to the convertible note. Pursuant to the amendment, the note bears simple interest at 10% per annum. The maturity date of the convertible note was amended to due on demand on or before March 31, 2022 for no additional consideration. The Company evaluated the transaction under the guidance found in ASC 470-50 Modification and Extinguishment As the future undiscounted cash flows are greater than or equal to the net carrying value of the original debt, the carrying amount of the debt at the time of the restructuring was not changed and a new effective interest rate was calculated as the discount rate that equates the present value of the future cash payments specified by the new terms with the carrying amount of the debt. Interest expense will be recognized prospectively such that a constant effective interest rate is applied to the carrying amount of the debt at the beginning of each period between restructuring and maturity, consistent with the interest method. As at November 30, 2021, the Company has recorded accrued interest of $59,671, which is included in accounts payable and accrued liabilities on the consolidated balance sheets. f) On January 7, 2021, the Company issued a convertible note with a face value of $300,000 (the “Note). The Note bears interest at 10% per annum and was due on demand after November 27, 2021. The Note was convertible into shares of the Company’s common stock at any time prior to April 23, 2021 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 Modification: On October 1, 2021, the Company entered into an amendment to the convertible note. Pursuant to the amendment, the note bears simple interest at 10% per annum. The maturity date of the convertible note was amended to due on demand on or before March 31, 2022 for no additional consideration. The Company evaluated the transaction under the guidance found in ASC 470-50 Modification and Extinguishment As the future undiscounted cash flows are greater than or equal to the net carrying value of the original debt, the carrying amount of the debt at the time of the restructuring was not changed and a new effective interest rate was calculated as the discount rate that equates the present value of the future cash payments specified by the new terms with the carrying amount of the debt. Interest expense will be recognized prospectively such that a constant effective interest rate is applied to the carrying amount of the debt at the beginning of each period between restructuring and maturity, consistent with the interest method. As at November 30, 2021, the Company has recorded accrued interest of $30,247, which is included in accounts payable and accrued liabilities on the consolidated balance sheets. g) On March 26, 2021, the Company issued a convertible note with a face value of $18,000 (the “Note”) and warrants to purchase 18,000 shares of the Company’s common stock at $0.50 per share for 1 year. The Note bears interest at 10% per annum. The Note was due on demand after September 26, 2021. The Note was convertible into shares of the Company’s common stock at any time prior to September 26, 2021 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 relative fair values of the convertible note and the warrants were $10,096 and $7,904 respectively. The effective conversion price was then determined to be $0.70. 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 (“BCF”). The Company recognized the relative fair value of the BCF of $4,016 and an equivalent discount. The Company then recognized the relative fair value of the warrants of $7,904 as additional-paid-in capital and an equivalent discount that further reduced the carrying value of the convertible debt to $6,080. The discount is being expensed over the term of the loan to increase the carrying value to the face value of the loan using effective interest rate method. Modification: On November 1, 2021, the Company entered into an amendment to the convertible note. Pursuant to the amendment, beginning on April 1, 2021, the note bears simple interest at 10% per annum. Pursuant to the amendment, the maturity date of the convertible note was amended to due on demand on or after March 31, 2022 for no additional consideration. The Company evaluated the transaction under the guidance found in ASC 470-50 Modification and Extinguishment As the future undiscounted cash flows are greater than or equal to the net carrying value of the original debt, the carrying amount of the debt at the time of the restructuring was not changed and a new effective interest rate was calculated as the discount rate that equates the present value of the future cash payments specified by the new terms with the carrying amount of the debt. Interest expense will be recognized prospectively such that a constant effective interest rate is applied to the carrying amount of the debt at the beginning of each period between restructuring and maturity, consistent with the interest method. As at November 30, 2021, the Company has recorded accrued interest of $1,228, which is included in accounts payable and accrued liabilities on the consolidated balance sheets. h) On March 26, 2021, the Company issued a convertible note with a face value of $100,000 (the “Note”) and warrants to purchase 100,000 shares of the Company’s common stock at $0.50 per share for 1 year. The Note bears interest at 10% per annum. The Note was due on demand after September 26, 2021. The Note was convertible into shares of the Company’s common stock at any time prior to September 26, 2021 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 relative fair values of the convertible note and the warrants were $56,086 and $43,914 respectively. The effective conversion price was then determined to be $0.70. 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 (“BCF”). The Company recognized the relative fair value of the BCF of $22,314 and an equivalent discount. The Company then recognized the relative fair value of the warrants of $43,914 as additional-paid-in capital and an equivalent discount that further reduced the carrying value of the convertible debt to $33,772. The discount is being expensed over the term of the loan to increase the carrying value to the face value of the loan using effective interest rate method. Modification: On November 1, 2021, the Company entered into an amendment to the convertible note. Pursuant to the amendment, beginning on April 1, 2021, the note bears simple interest at 10% per annum. Pursuant to the amendment, the maturity date of the convertible note was amended to due on demand on or after March 31, 2022 for no additional consideration. The Company evaluated the transaction under the guidance found in ASC 470-50 Modification and Extinguishment As the future undiscounted cash flows are greater than or equal to the net carrying value of the original debt, the carrying amount of the debt at the time of the restructuring was not changed and a new effective interest rate was calculated as the discount rate that equates the present value of the future cash payments specified by the new terms with the carrying amount of the debt. Interest expense will be recognized prospectively such that a constant effective interest rate is applied to the carrying amount of the debt at the beginning of each period between restructuring and maturity, consistent with the interest method. As at November 30, 2021, the Company has recorded accrued interest of $6,822, which is included in accounts payable and accrued liabilities on the consolidated balance sheets. i) On April 30, 2021, the Company issued a convertible note with a face value of $100,000 (the “Note”) and warrants to purchase 100,000 shares of the Company’s common stock at $1.00 per share for 1 year. The Note bears interest at 10% per annum. The Note was due on demand after October 31, 2021. The Note was convertible into shares of the Company’s common stock at any time prior to October 31, 2021 at a conversion price of $1.00 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 relative fair values of the convertible note and the warrants were $61,493 and $38,507 respectively. The effective conversion price was then determined to be $0.61. 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 (“BCF”). The Company recognized the relative fair value of the BCF of $27,272 and an equivalent discount. The Company then recognized the relative fair value of the warrants of $38,507 as additional-paid-in capital and an equivalent discount that further reduced the carrying value of the convertible debt to $34,221. The discount is being expensed over the term of the loan to increase the carrying value to the face value of the loan using effective interest rate method. Modification: On November 1, 2021, the Company entered into an amendment to the convertible note. Pursuant to the amendment, beginning on April 1, 2021, the note bears simple interest at 10% per annum. Pursuant to the amendment, the maturity date of the convertible note was amended to due on demand on or after March 31, 2022 for no additional consideration. The Company evaluated the tra |
Equity
Equity | 3 Months Ended |
Nov. 30, 2021 | |
Equity | |
10. Equity | 10. Equity During the three months ended November 30, 2020: On September 30, 2020, the Company issued 120,000 shares of common stock at $1.25 per share for gross cash proceeds of $150,000. In connection with the extension of convertible notes payable, as of November 30, 2020, the Company has common stock issuable of $129,952 (August 31, 2020 - $19,952). During the three months ended November 30, 2021: On September 2, 2021, the Company issued 2,175,933 common shares at fair value of $2,447,925 on issuance date from treasury to the CFO and COO (Note 11) and 1,900,000 common shares at fair value of $2,137,500 to certain employees of the Company as bonuses for past services, which is recorded as stock-based compensation. On September 2, 2021, the Company issued 2,997,237 common shares measured at fair value on issuance date of $3,371,892 from treasury for consulting services related to business development for a 12-month period from the issuance date. As the future benefit of the consulting services to be performed cannot be determined, the entire amount was expensed during the three months ended November 30, 2021. During the year ended August 31, 2021, the Company re-issued 750,000 shares of common stock with total fair value of $637,500 for consulting services, out of which, $425,000 was expensed as consulting fees during the prior year and $159,374 was expensed during the three months ended November 30, 2021. As at November 30, 2021, $53,126 was deferred compensation included in prepaid expenses on the consolidated balance sheet. On October 20, 2021, the Company issued 3,753,094 units at $0.75 per unit for proceeds of $2,814,821, of which $790,467 was received during the year ended August 31, 2021, and $250,000 was receivable at November 30, 2021. Each unit consists of one common share of the Company and one warrant to purchase the Company’s one common shares at $1.25 for a period of two years. During the three months ended November 30, 2021, the Company received an additional $85,146 in cash for units subscribed at $0.75 per unit. In connection with the financing, the Company incurred brokerage commission fees of $205,735. On November 5, 2021, the Company issued 705,000 units at $0.75 per unit for proceeds of $528,750. Each unit consists of one common share of the Company and one warrant to purchase the Company’s one common shares at $1.25 for a period of two years. In connection with the financing, the Company issued 8,000 shares of common stock with a fair value of $6,000 as a finder’s fee and incurred other finders’ fees of $41,654. During the three months ended November 30, 2021, the Company issued 268,000 common shares to certain investors for no consideration by error. The Company is in the process of retracting the shares. |
Related party transactions and
Related party transactions and balances | 3 Months Ended |
Nov. 30, 2021 | |
Related party transactions and balances | |
11. Related party transactions and balances | 11. 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 were as follows: November 30, 2021 November 30, 2020 Consulting fees and benefits $ 91,986 $ 88,865 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. 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: November 30, 2021 August 31, 2021 CEO and Director $ (61,796 ) $ (65,254 ) COO and Director (76,960 ) (76,574 ) An entity controlled by the CFO (37,961 ) (34,655 ) $ (176,717 ) $ (176,483 ) As of November 30, 2021, the Company had $176,717 (August 31, 2021 - $176,483) payable to related parties for expenses incurred or expensed paid on behalf of the Company by the parties which has been presented in accounts payable and accrued liabilities. c) Stock-based compensation On September 2, 2021, the Company issued 400,000 common shares from treasury at fair value of $450,000 to an entity controlled by the CFO as a bonus for past services provided. On September 2, 2021, the Company issued 1,775,933 common shares from treasury at fair value of $1,997,925 to entities controlled by the COO and Director for as a bonus for past services provided. |
Financial risk factors
Financial risk factors | 3 Months Ended |
Nov. 30, 2021 | |
Financial risk factors | |
12. Financial risk factors | 12. 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. 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. 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 Canadian 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: November 30, 2021 Balance in Canadian dollars: Cash and cash equivalents $ 70,163 Accounts payable (454,262 ) Net exposure Balance in US dollars: $ (384,099 ) A 10% change in the US dollar to the Canadian dollar exchange rate would impact the Company’s net loss by approximately $38,410 for the three months ended November 30, 2021 (November 30, 2020 – $35,296). The Company is exposed to foreign currency risk to the extent that the following monetary assets and liabilities are denominated in Colombian Pesos: November 30, 2021 Balance in Colombian Pesos dollars: Cash and cash equivalents $ 281,751,039 Other receivables 83,072,204 Accounts payable (3,170,820,800 ) Net exposure (2,805,997,557 ) Balance in US dollars: $ (702,870 ) A 10% change in the US dollar to the Colombian Peso exchange rate would impact the Company’s net loss by approximately $70,287 for the three months ended November 30, 2021 (November 30, 2020 - $74,408). |
Capital management
Capital management | 3 Months Ended |
Nov. 30, 2021 | |
Capital management | |
13. Capital management | 13. 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 | 3 Months Ended |
Nov. 30, 2021 | |
Commitments | |
14. Commitments | 14. Commitments a) In August 2019, the Company entered into an agreement for the construction and installation of equipment (Note 4a), as of August 31, 2021, $208,279 remained payable upon completion of the construction. b) On August 30, 2019, the Company entered into sales agreement to purchase an extraction system to be use in future at its operation in Colombia. The equipment has a value of CAD$658,260. The terms of the agreement require the Company to pay the 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 November 30, 2021, the $233,496 (Note 4(b)) has been recorded as a deposit until the remaining purchase price is paid and the equipment is received. c) On June 30, 2021, the Company entered into certain construction agreements for building an energy network and transformer and a water treatment system with an aggregated cost of $437,673 (COP$1,747,279,680). As at November 30, 2021, the weighted average percentage of completion is 73% or $319,240 (COP$1,280,665,381), of the work related to the construction agreement, which has been capitalized as construction in process. As at November 30, 2021, the Company held deposits of $77,829 (COP$298,175,238) and is obligated to pay the remaining $111,032 (COP$443,261,101) prior to completion of the construction. d) As of November 30, 2021, the Company recorded a contingent liability of $547,190 (CAD$700,000) for expenses in connection with Allied Colombia acquisition, which is included in the balance of accounts payable and accrued liabilities on the consolidated balance sheets. e) During the year ended August 31, 2021, the Company settled amounts owed to certain previous management of $108,500, which was presented as settlement payments in the consolidated statement of operations and comprehensive loss. As at November 30, 2021, $90,000 remained outstanding and was included in accounts payable and accrued liabilities in the consolidated balance sheet. f) The Company has entered into leases for farm land in Colombia. See Note 7 for details. |
Share purchase warrants
Share purchase warrants | 3 Months Ended |
Nov. 30, 2021 | |
Share purchase warrants | |
15. Share purchase warrants | 15. Share purchase warrants The following table summarizes the continuity of share purchase warrants: Number of Weighted average exercise price Balance, August 31, 2021 3,663,135 1.21 Issued 3,717,666 1.25 Expired (320,000 ) 1.25 Balance, November 30, 2021 7,060,801 1.23 As at November 30, 2021, the following share purchase warrants were outstanding: Number of warrants Exercise Expiry date 130,673 1.25 September 29, 2022 30,090 1.25 October 16, 2022 68,750 1.25 November 11, 2022 240,000 1.25 November 28, 2022 118,000 0.50 March 26, 2022 180,000 1.00 April 29, 2022 1,446,666 1.25 June 11, 2023 50,000 1.25 July 17, 2023 103,956 1.25 July 26, 2023 200,000 1.25 August 18, 2023 775,000 1.25 August 28, 2023 100,000 1.25 October 1, 2023 2,812,666 1.25 October 20, 2023 100,000 1.25 October 25, 2023 705,000 1.25 November 6, 2023 |
Stock Options
Stock Options | 3 Months Ended |
Nov. 30, 2021 | |
Stock Options | |
16. Stock Options | 16. Stock options A summary of the Company’s stock option activity is as follows: Number of Options Weighted Average Exercise Price $ Weighted Average Remaining Contractual Term Aggregate Intrinsic Value $ Balance, August 31, 2021 4,450,000 0.77 4.42 1,334,000 Granted 100,000 1.125 4.76 Outstanding, November 30, 2021 4,550,000 0.78 4.19 5,014,000 Exercisable, November 30, 2021 1,583,333 0.79 4.21 1,721,667 During the three months ended November 30, 2021, the Company recorded stock-based compensation of $531,255 for options granted on the consolidated statement of operations. The fair value of each option granted was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions: Three Months Ended November 30, 2021 Three Months Ended November 30, 2020 Expected dividend yield 0 % -% Expected volatility 166 % -% Expected life (in years) 5 - Risk-free interest rate 0.78 % -% At November 30, 2021, there was $765,815 of unrecognized compensation costs related to non-vested stock-based compensation arrangements granted under the Plan. |
Noncash activities
Noncash activities | 3 Months Ended |
Nov. 30, 2021 | |
Noncash activities | |
17. Non-cash activities | 17. Non-cash activities For the Three Months Ended November 30, 2021 For the Three Months Ended November 30, 2020 Non-cash activities: Shares issued from treasury for services and bonuses 7,957,316 - Beneficial conversion feature 80,247 153,764 Relative fair value of warrants issuable with convertible note 120,310 133,127 Relative fair value of shares issued on modification of convertible notes - 110,000 |
Segment disclosure
Segment disclosure | 3 Months Ended |
Nov. 30, 2021 | |
Segment disclosure | |
18. Segment disclosure | 18. Segment disclosure The Company has two operating segments including: a) Allied Colombia, a Colombian based company through which the Company intends to commence commercial production in Colombia. (Allied Colombia) 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 Allied Colombia reporting segment in one geographical area (Colombia). Financial statement information by operating segment for the three month period ended November 30, 2021 is presented below: Allied $ Allied Colombia $ Total $ Net sales (4,679 ) 14,761 10,082 Net loss (9,662,598 ) (405,483 ) (10,068,081 ) Accretion 132,033 - 132,033 Depreciation and amortization - 13,299 13,299 Total assets as of November 30, 2021 3,617,195 1,230,389 4,847,584 Revenues $ Total Assets $ Canada 3,617,195 Colombia 10,081 1,230,389 Total 10,081 4,847,584 |
Subsequent events
Subsequent events | 3 Months Ended |
Nov. 30, 2021 | |
Subsequent events | |
19. Subsequent events | 19. Subsequent events a) On March 30, 2021, the Company entered into an asset purchase agreement (“APA”) to acquire two privileged licenses issued by the Nevada Department of Taxation purposed for the cultivation of cannabis (the “Licenses”). In consideration for the licenses, the Company agreed to pay $150,000, issue a $1,350,000 promissory note and assume certain liabilities. At November 30, 2021, the asset purchase has not been closed and the amount paid has been recorded as a deposit (Note 4 (c)). The promissory note bears interest at the Short Term Applicable Federal Rate of 0.11% per annum and shall be repaid through quarterly payments of a minimum of 50% of the net operating income received in connection with the Nevada cannabis operation associated with the acquired Licenses. All outstanding principal and accrued interest is due two years after issuance of the note. As of November 30, 2021, the Company has not issued any considerations under the APA. The Company has not received any assets outlined in the APA. The asset purchase has not been closed. Concurrent with the APA, the Company entered into a services agreement (the “Services Agreement”) and a land lease agreement (the “Lease Agreement”) with the seller of the Licenses. Pursuant to the Services agreement the seller of the licenses will provide consulting services to the Company in exchange for the reimbursement of expenses incurred. Pursuant to the Lease Agreement, the Company leased land in North Las Vegas to accommodate an approximately 9,000 square foot building to be used for the cultivation, marketing or sale of cannabis for a period of 25 years. Lease payments shall commence on the date which the first cannabis plant is planted, and monthly lease payments are as follows: · $1,500 per month for the first five years. · $1,800 per month for years 6 to 10 of the lease. · $2,025 per month for years 11 to 15 of the lease. · $2,280 per month for years 16 to 20 of the lease. · $2,565 per month for years 21 to 25 of the lease. In addition, for the term of the lease, the Company shall pay the landlord 50% of the net operating income derived from the cannabis cultivation operation located at the leased premises. The Company is currently negotiating to significantly revise this agreement and structure. Effectively the APA, the Lease Agreement and the Service Agreement will be terminated and replaced by an Option to Purchase Agreement. Our wholly owned subsidiary, Allied US Products LLC, a Nevada limited liability company, intends to revise the structure to enter into an Option to Purchase Agreement (the “ Option Purchase Agreement”) which allows for the purchase of a Nevada State US-based cannabis license from a subsidiary of Fiore Cannabis, Ltd. only upon on the occurrence or waiver of the changes in U.S. federal law to permit the general cultivation, distribution and possession of marijuana or to remove the regulation of such activities from the federal laws of the United States (the “Triggering Event”). While the Company has begun to enter into arrangements with United States based companies that may themselves participate in the United States cannabis market, we do not hold any US assets, but rather have a call option to purchase that can be exercisable or exchangeable upon cannabis becoming legal or permissible in the United States under Federal law. The Company will only conduct business activities related to growing or processing cannabis in jurisdictions, including the United States, when it is federally permissible to do so. The Company is not considered a United States Marijuana Issuer (as defined in the Canadian Securities Administrators Staff Notice 51-352 – Issuers with United States Marijuana-Related Activities (the “Staff Notice”)) nor does it have material ancillary involvement in the United States. cannabis industry in accordance with the Staff Notice. While the Company has several arrangements with United States based companies that may themselves participate in the United States cannabis market, these relationships do not violate the federal laws of the United States respecting cannabis and in no manner involve the Company in any activities in the United States respecting cannabis. b) On December 23, 2021, the Company issued two secured convertible notes with a face value of $200,000. The note bears interest at 10% per annum and is due on demand on or after June 23, 2022. The Note is convertible into shares of the Company’s common stock at any time prior to June 23, 2022 at a conversion price of $1.25 per share. c) On January 11, 2022, the Company issued a secured convertible note with a face value of $150,000. The note bears interest at 10% per annum and is due on demand on or after July 10, 2022. The Note is convertible into shares of the Company’s common stock at any time prior to July 10, 2022 at a conversion price of $1.25 per share. d) Subsequent to November 30, 2021, the Company received $27,000 for subscription to 36,000 units at $0.75 per unit. Each unit consists of one common share of the Company and one warrant to purchase the Company’s one common share at $1.25 for a period of two years. e) Subsequent to November 30, 2021, the Company entered into an amendment agreement for the financing agreement as described in Note 8 a). Pursuant to the amendment, the Company will make monthly payments of $37,613. For the remaining 24 months, the Company will make monthly payments of $66,288. If the first 6 monthly payments are made on time, the Company may prepay the unamortized loan balance with a 2% penalty of the remaining balance. |
Significant accounting polici_2
Significant accounting policies (Policies) | 3 Months Ended |
Nov. 30, 2021 | |
Significant accounting policies | |
Principles of consolidation | The consolidated financial statements include accounts of Allied Corp. and its wholly-owned subsidiaries, including AM Biosciences, Allied US Products LLC, Tactical Relief LLC, Baleno Ltd. and Allied Colombia. 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 three months when acquired. The Company did not have any cash equivalents as of November 30, 2021 and August 31, 2021. |
Property and Equipment | Property, plant and equipment are stated at cost. The Company depreciates the cost of property, plant and equipment over their estimated useful lives at the following annual rates and methods: Farm facility and equipment 1 - 10 years straight-line basis Office and computer equipment 5 - 10 years straight-line basis Land equipment 10 years straight-line basis |
Inventory | Inventory is comprised of raw materials, supplies, vegetative and flowering plants, dried flower, diluted crude and CBD isolates available for sale, and purchased cannabis products. Inventory is stated at the lower of cost or net realizable value, determined using weighted average cost. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. At the end of each reporting period, the Company performs an assessment of inventory and records write-downs for excess and obsolete inventories based on the Company’s estimated forecast of product demand, production requirements, market conditions, regulatory environment, and spoilage. Actual inventory losses may differ from management’s estimates and such differences could be material to the Company’s consolidated balance sheets, statements of net loss and comprehensive loss and statements of cash flows. |
Intangible assets | Intangible assets include licenses which are being amortized over their estimated useful lives of 10 years. The Company’s licenses are amortized over their economic or legal life on a straight-line basis, whichever is shorter. 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 |
Foreign currency translation and functional currency conversion | Items included in these consolidated 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. The change in functional currency was accounted for prospectively from September 10, 2019 and prior period financial statements 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 transactions. 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 Allied Colombia to be the Colombian peso. The functional currency for all other subsidiaries is the U.S. dollar. |
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. |
Revenue Recognition | The Company’s revenue is comprised of sales of cannabis products. The Company’s revenue-generating activities have a single performance obligation and revenue is recognized at the point in time when control of the product transfers and the Company’s obligations have been fulfilled. This generally occurs when the product is shipped or delivered to the customer, depending upon the method of distribution and shipping terms set forth in the customer contract. Revenue is measured as the amount of consideration the Company expects to receive in exchange for the sale of the Company’s product. Certain of the Company’s customer contracts may provide the customer with a right of return. In certain circumstances the Company may also provide a retrospective price adjustment to a customer. These items give rise to variable consideration, which is recognized as a reduction of the transaction price based upon the expected amounts of the product returns and price adjustments at the time revenue for the corresponding product sale is recognized. The determination of the reduction of the transaction price for variable consideration requires that the Company make certain estimates and assumptions that affect the timing and amounts of revenue recognized. Sales of products are for cash or otherwise agreed-upon credit terms. The Company’s payment terms vary by location and customer; however, the time period between when revenue is recognized and when payment is due is not significant. The Company estimates and reserves for its bad debt exposure based on its experience with past due accounts and collectability, write-off history, the aging of accounts receivable and an analysis of customer data. |
Net income (loss) per common share | Net income (loss) per share is calculated in accordance with ASC 260, Earnings per Share 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 |
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 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, due from related parties, accounts payable, note payable, and convertible notes 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. For certain of the Company’s financial instruments, including accounts payable, due from related parties, notes and loans payable, the carrying amounts approximate their fair values due to the short maturities. The Company does not have any assets or liabilities measured at fair value on a recurring basis presented on the Company’s balance sheet as of November 30, 2021 and August 31, 2021 other than cash. 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. |
Leases | In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, “ Leases (Topic 842) 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 7 – Leases. |
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 fair value of the equity interests of the other combining entity or entities, where the acquirer usually is the combining entity whose relative size (measured in, for example, assets, revenues, or earnings) is significantly larger than that of the other combining entity or entities. 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 acquire for accounting purposes (the accounting acquiree); and (b) the private entity as the acquirer for accounting purposes (the accounting acquirer). 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 of the consideration transferred by the accounting acquirer for its interest in the accounting acquiree is based on the number of equity interests the legal subsidiary would have had to issue to give the owners of the legal parent the same percentage equity interest in the combined entity that results from the reverse acquisition. The fair value of the number of equity interests calculated in that way can be used as the fair value of consideration transferred in exchange for the acquiree. The assets and liabilities of the legal acquiree are measured and recognized in the consolidated financial statements at their pre-combination carrying amounts (see ASC 805-40-45-2(a)). Presentation of consolidated financial statements post reverse acquisition Pursuant to ASC 805-40-45-1 and 45-2, 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 consolidated financial statements also is retroactively adjusted to reflect the legal capital of the legal parent (accounting acquiree). The 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”; (c) the retained earnings and other equity balances of the legal subsidiary (accounting acquirer) before the business combination; (d) the amount recognized as issued equity interests in the consolidated financial statements determined by adding the issued equity interest of the legal subsidiary (the accounting acquirer) outstanding immediately before the business combination to the fair value of the legal parent (accounting acquiree) determined in accordance with the guidance in this topic applicable to business combinations. However, the equity structure (that is, the number and type of equity interests issued) reflects the equity structure of the legal parent (the accounting acquiree), including the equity interests the legal parent issued to effect the combination. 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 acquisition 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 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 acquire 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 Allied Colombia (from the date of acquisition, February 18, 2020). All intercompany balances and transactions have been eliminated upon consolidation. |
Recent accounting pronouncements | The Company does not expect that recent accounting pronouncements or changes in accounting pronouncements during the three months ended November 30, 2021, are of significance or potential significance to the Company. |
Significant accounting polici_3
Significant accounting policies (Tables) | 3 Months Ended |
Nov. 30, 2021 | |
Significant accounting policies | |
Schedule of property and equipment | Farm facility and equipment 1 - 10 years straight-line basis Office and computer equipment 5 - 10 years straight-line basis Land equipment 10 years straight-line basis |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Nov. 30, 2021 | |
Inventory (Tables) | |
Schedule of Inventory | November 30, 2021 August 31, 2021 Work in progress $ 37,425 $ 51,831 Finished goods 118,056 84,430 Total inventory $ 155,481 $ 136,261 |
Deposits and advances (Tables)
Deposits and advances (Tables) | 3 Months Ended |
Nov. 30, 2021 | |
Deposits and advances | |
Schedule of deposits and advances | November 30, 2021 August 31, 2021 a) Towards the purchase of prefabricated buildings $ 2,656,695 $ 2,656,695 b) Vitalis equipment deposit 233,496 233,496 c) Deposit towards a license acquisition 150,000 150,000 d) Prepayments for construction facility in Colombia 77,829 115,972 e) Eteros equipment deposit 115,700 - Total deposits and advances $ 3,233,720 $ 3,156,163 |
Property plant and equipment (T
Property plant and equipment (Tables) | 3 Months Ended |
Nov. 30, 2021 | |
Property plant and equipment | |
Schedule of property plant and equipment | Construction in process Farm facility and equipment Office and computer equipment Land equipment Total August 31, 2021 $ 27,469 $ 274,776 $ 10,653 $ 16,310 $ 329,208 Additions 334,383 93,657 5,815 9,329 443,184 Foreign exchange (15,143 ) (19,329 ) (838 ) (1,300 ) (36,610 ) November 30, 2021 $ 346,709 $ 349,104 $ 15,629 $ 24,339 $ 735,782 Accumulated depreciation August 31, 2021 $ - $ 58,519 $ 1,935 $ 919 $ 61,373 Additions - 12,374 490 435 13,299 Foreign exchange - (3,810 ) (130 ) (69 ) (4,009 ) November 30, 2021 $ - $ 67,083 $ 2,295 $ 1,285 $ 70,663 Net book value August 31, 2021 $ 27,469 $ 216,257 $ 8,718 $ 15,391 $ 267,835 November 30, 2021 $ 346,709 $ 282,021 $ 13,335 $ 23,054 $ 665,119 |
Intangible assets (Tables)
Intangible assets (Tables) | 3 Months Ended |
Nov. 30, 2021 | |
Intangible assets | |
Schedule of intangible assets | Cost Foreign exchange $ Accumulated amortization Accumulated impairment November 30, 2021 Net carrying value August 31, 2021 Net carrying value Cannabis licenses 5,435,334 (464,973 ) (1,122,694 ) (3,801,667 ) 46,000 46,000 5,435,334 (464,973 ) (1,122,694 ) (3,801,667 ) 46,000 46,000 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Nov. 30, 2021 | |
Leases | |
Schedule of components of lease expenses | $ Operating lease cost: Amortization of right-of-use assets 5,810 Interest on lease liabilities 9,050 Total operating lease cost 14,860 |
Schedule of supplemental cash flow and other information related to leases | $ Lease payments 14,860 |
Schedule of supplemental balance sheet information related to leases | $ Cost 282,273 Accumulated amortization (13,240 ) Foreign exchange (41,253 ) Net carrying value at November 30, 2021 227,780 |
Schedule of future minimum lease payments | $ 2022 42,767 2023 57,023 2024 57,023 Thereafter 206,234 Total minimum lease payments 363,047 Less: amount of lease payments representing effects of discounting (135,267 ) Present value of future minimum lease payments 227,780 Less: current obligations under leases (24,495 ) Lease liabilities, net of current portion 203,285 |
Related party transactions an_2
Related party transactions and balances (Tables) | 3 Months Ended |
Nov. 30, 2021 | |
Related party transactions and balances | |
Schedule of related party compensation costs | November 30, 2021 November 30, 2020 Consulting fees and benefits $ 91,986 $ 88,865 |
Schedule of due from related party | November 30, 2021 August 31, 2021 CEO and Director $ (61,796 ) $ (65,254 ) COO and Director (76,960 ) (76,574 ) An entity controlled by the CFO (37,961 ) (34,655 ) $ (176,717 ) $ (176,483 ) |
Financial risk factors (Tables)
Financial risk factors (Tables) | 3 Months Ended |
Nov. 30, 2021 | |
Financial risk factors | |
Schedule of foreign currency translation | November 30, 2021 Balance in Canadian dollars: Cash and cash equivalents $ 70,163 Accounts payable (454,262 ) Net exposure Balance in US dollars: $ (384,099 ) November 30, 2021 Balance in Colombian Pesos dollars: Cash and cash equivalents $ 281,751,039 Other receivables 83,072,204 Accounts payable (3,170,820,800 ) Net exposure (2,805,997,557 ) Balance in US dollars: $ (702,870 ) |
Share purchase warrants (Tables
Share purchase warrants (Tables) | 3 Months Ended |
Nov. 30, 2021 | |
Share purchase warrants | |
Schedule of share purchase warrants | Number of Weighted average exercise price Balance, August 31, 2021 3,663,135 1.21 Issued 3,717,666 1.25 Expired (320,000 ) 1.25 Balance, November 30, 2021 7,060,801 1.23 |
Schedule of warrants outstanding | Number of warrants Exercise Expiry date 130,673 1.25 September 29, 2022 30,090 1.25 October 16, 2022 68,750 1.25 November 11, 2022 240,000 1.25 November 28, 2022 118,000 0.50 March 26, 2022 180,000 1.00 April 29, 2022 1,446,666 1.25 June 11, 2023 50,000 1.25 July 17, 2023 103,956 1.25 July 26, 2023 200,000 1.25 August 18, 2023 775,000 1.25 August 28, 2023 100,000 1.25 October 1, 2023 2,812,666 1.25 October 20, 2023 100,000 1.25 October 25, 2023 705,000 1.25 November 6, 2023 |
Stock Options (Tables)
Stock Options (Tables) | 3 Months Ended |
Nov. 30, 2021 | |
Stock Options | |
Schedule of Stock Options activity | Number of Options Weighted Average Exercise Price $ Weighted Average Remaining Contractual Term Aggregate Intrinsic Value $ Balance, August 31, 2021 4,450,000 0.77 4.42 1,334,000 Granted 100,000 1.125 4.76 Outstanding, November 30, 2021 4,550,000 0.78 4.19 5,014,000 Exercisable, November 30, 2021 1,583,333 0.79 4.21 1,721,667 |
Schedule of weighted average assumptions | Three Months Ended November 30, 2021 Three Months Ended November 30, 2020 Expected dividend yield 0 % -% Expected volatility 166 % -% Expected life (in years) 5 - Risk-free interest rate 0.78 % -% |
Noncash activities (Tables)
Noncash activities (Tables) | 3 Months Ended |
Nov. 30, 2021 | |
Schedule of Non-cash activities | For the Three Months Ended November 30, 2021 For the Three Months Ended November 30, 2020 Non-cash activities: Shares issued from treasury for services and bonuses 7,957,316 - Beneficial conversion feature 80,247 153,764 Relative fair value of warrants issuable with convertible note 120,310 133,127 Relative fair value of shares issued on modification of convertible notes - 110,000 |
Segment disclosure (Tables)
Segment disclosure (Tables) | 3 Months Ended |
Nov. 30, 2021 | |
Segment disclosure | |
Schedule of operating segment | Allied $ Allied Colombia $ Total $ Net sales (4,679 ) 14,761 10,082 Net loss (9,662,598 ) (405,483 ) (10,068,081 ) Accretion 132,033 - 132,033 Depreciation and amortization - 13,299 13,299 Total assets as of November 30, 2021 3,617,195 1,230,389 4,847,584 |
Schedule of geographic information | Revenues $ Total Assets $ Canada 3,617,195 Colombia 10,081 1,230,389 Total 10,081 4,847,584 |
Nature of operations reverse _2
Nature of operations reverse takeover transaction and going concern (Details Narrative) - USD ($) | Sep. 10, 2019 | Nov. 30, 2021 | Nov. 30, 2020 | Aug. 31, 2021 | Jul. 25, 2019 |
Common stock, shares outstanding | 78,268,780 | 91,666,131 | 79,858,867 | ||
Shares reacquired by treasury, shares | 4,500,000 | ||||
Cancellation of treasury stock | 10,459,220 | ||||
Net loss for the period | $ (10,068,081) | $ (1,195,862) | |||
Working capital deficit | $ 4,229,248 | ||||
Reorganization Agreement [Member] | Pacific Capital Investment Group, Inc. [Member] | |||||
Acquire percentage | 100.00% | 100.00% | |||
Business aquisition, common stock issued by related party to SECFAC | 51,200,014 | ||||
Description of delivered as part of the transaction | representing approximately 65.42% of the outstanding equity of Allied Corp. to SECFAC Exchange Corp. |
Significant accounting polici_4
Significant accounting policies (Details) | 3 Months Ended |
Nov. 30, 2021 | |
Farm facility and equipment [Member] | Minimum [Member] | |
Estimated useful lives | 1 year |
Farm facility and equipment [Member] | Maximum [Member] | |
Estimated useful lives | 10 years |
Office and Computer Equipment [Member] | Minimum [Member] | |
Estimated useful lives | 5 years |
Office and Computer Equipment [Member] | Maximum [Member] | |
Estimated useful lives | 10 years |
Land Equipment [Member] | |
Estimated useful lives | 10 years |
Significant accounting polici_5
Significant accounting policies (Details Narrative) | 3 Months Ended |
Nov. 30, 2021 | |
Significant accounting policies | |
Intangible asset estimated useful life | 10 years |
Inventory (Details)
Inventory (Details) - USD ($) | Nov. 30, 2021 | Aug. 31, 2021 |
Inventory | ||
Work-in-progress | $ 37,425 | $ 51,831 |
Finished goods | 118,056 | 84,430 |
Total inventory | $ 155,481 | $ 136,261 |
Inventory (Details Narrative)
Inventory (Details Narrative) | 3 Months Ended |
Nov. 30, 2021USD ($) | |
Inventory | |
Write-down of inventory to net realizable value | $ 252,639 |
Deposits and advances (Details)
Deposits and advances (Details) - USD ($) | Nov. 30, 2021 | Aug. 31, 2021 |
Total deposits and advances | $ 3,233,720 | $ 3,156,163 |
Towards the purchase of prefabricated buildings [Member] | ||
Total deposits and advances | 2,656,695 | 2,656,695 |
Vitalis equipment deposit [Member] | ||
Total deposits and advances | 233,496 | 233,496 |
Deposit towards a license acquisition [Member] | ||
Total deposits and advances | 150,000 | 150,000 |
Prepayments for construction facility in Colombia [Member] | ||
Total deposits and advances | 77,829 | 115,972 |
Refundable deposits towards future land acquisitions [Member] | ||
Total deposits and advances | $ 115,700 | $ 0 |
Deposits and advances (Details
Deposits and advances (Details Narrative) | Nov. 30, 2021USD ($)ft² | Aug. 31, 2021USD ($) |
Total deposits and advances | $ 3,233,720 | $ 3,156,163 |
Purchase Agreement [Member] | ||
Area of land | ft² | 8,700 | |
Towards the purchase of prefabricated buildings [Member] | ||
Total deposits and advances | $ 2,656,695 | 2,656,695 |
Vitalis equipment deposit [Member] | ||
Total deposits and advances | 233,496 | 233,496 |
Deposit towards a license acquisition [Member] | ||
Total deposits and advances | 150,000 | 150,000 |
Prepayments for construction facility in Colombia [Member] | ||
Total deposits and advances | 77,829 | 115,972 |
Two Purchase and Sale Agreement [Member] | ||
Total deposits and advances | $ 115,700 | $ 0 |
Property plant and equipment (D
Property plant and equipment (Details) | Nov. 30, 2021USD ($) |
Cost of asset, Begining balance | $ 329,208 |
Cost of asset, Additions | 443,184 |
Cost of asset, Foreign exchange | (36,610) |
Cost of asset, Ending balance | 735,782 |
Accumulated depreciation | |
Accumulated depreciation, Begining balances | 61,373 |
Accumulated depreciation, Additions | 13,299 |
Accumulated depreciation, Foreign exchange | (4,009) |
Accumulated depreciation, Ending balance | 70,663 |
Net book value, Begining balance | 267,835 |
Net book value, Ending balance | 665,119 |
Land Equipment [Member] | |
Cost of asset, Begining balance | 16,310 |
Cost of asset, Additions | 9,329 |
Cost of asset, Foreign exchange | (1,300) |
Cost of asset, Ending balance | 24,339 |
Accumulated depreciation | |
Accumulated depreciation, Begining balances | 919 |
Accumulated depreciation, Additions | 435 |
Accumulated depreciation, Foreign exchange | (69) |
Accumulated depreciation, Ending balance | 1,285 |
Net book value, Begining balance | 15,391 |
Net book value, Ending balance | 23,054 |
Office and Computer Equipment [Member] | |
Cost of asset, Begining balance | 10,653 |
Cost of asset, Additions | 5,815 |
Cost of asset, Foreign exchange | (838) |
Cost of asset, Ending balance | 15,629 |
Accumulated depreciation | |
Accumulated depreciation, Begining balances | 1,935 |
Accumulated depreciation, Additions | 490 |
Accumulated depreciation, Foreign exchange | (130) |
Accumulated depreciation, Ending balance | 2,295 |
Net book value, Begining balance | 8,718 |
Net book value, Ending balance | 13,335 |
Farm facility and equipment [Member] | |
Cost of asset, Begining balance | 274,776 |
Cost of asset, Additions | 93,657 |
Cost of asset, Foreign exchange | (19,329) |
Cost of asset, Ending balance | 349,104 |
Accumulated depreciation | |
Accumulated depreciation, Begining balances | 58,519 |
Accumulated depreciation, Additions | 12,374 |
Accumulated depreciation, Foreign exchange | (3,810) |
Accumulated depreciation, Ending balance | 67,083 |
Net book value, Begining balance | 216,257 |
Net book value, Ending balance | 282,021 |
Construction in progress [Member] | |
Cost of asset, Begining balance | 27,469 |
Cost of asset, Additions | 334,383 |
Cost of asset, Foreign exchange | (15,143) |
Cost of asset, Ending balance | 346,709 |
Accumulated depreciation | |
Accumulated depreciation, Begining balances | 0 |
Accumulated depreciation, Additions | 0 |
Accumulated depreciation, Foreign exchange | 0 |
Accumulated depreciation, Ending balance | 0 |
Net book value, Begining balance | 27,469 |
Net book value, Ending balance | $ 346,709 |
Property plant and equipment _2
Property plant and equipment (Details Narrative) | 3 Months Ended |
Nov. 30, 2021USD ($) | |
Property plant and equipment | |
Depreciation on property, plant and equipment | $ 9,100 |
Intangible assets (Details)
Intangible assets (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Nov. 30, 2021 | Aug. 31, 2021 | |
Cost | $ 5,435,334 | |
Foreign exchange | (464,973) | |
Accumulated amortization | (1,122,694) | |
Accumulated impairment | (3,801,667) | |
Intangible assets net carrying value | 46,000 | $ 46,000 |
Cannabis Licenses [Member] | ||
Cost | 5,435,334 | |
Foreign exchange | (464,973) | |
Accumulated amortization | (1,122,694) | |
Accumulated impairment | (3,801,667) | |
Intangible assets net carrying value | $ 46,000 | $ 46,000 |
Intangible assets (Details Narr
Intangible assets (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Nov. 30, 2021 | Aug. 31, 2021 | Feb. 17, 2020 | |
Impairment of intangible assets | $ 2,687,695 | ||
Licenses estimated recoverable amount | $ 46,000 | ||
Amortization of licenses | $ 1,122,694 | ||
Medicolumbia [Member] | |||
Acquisition of licenses | $ 5,435,334 | ||
Amortization included in inventory | 158,121 | ||
Amortization of licenses | $ 658,836 |
Leases (Details)
Leases (Details) | 3 Months Ended |
Nov. 30, 2021USD ($) | |
Operating lease cost: | |
Amortization of right-of-use assets | $ 5,810 |
Interest on lease liabilities | 9,050 |
Total operating lease cost | $ 14,860 |
Leases (Details 1)
Leases (Details 1) | 3 Months Ended |
Nov. 30, 2021USD ($) | |
Leases | |
Lease payments | $ 14,860 |
Leases (Details 2)
Leases (Details 2) | Nov. 30, 2021USD ($) |
Leases | |
Cost | $ 282,273 |
Accumulated amortization | (13,240) |
Foreign exchange | (41,253) |
Net carrying value | $ 227,780 |
Leases (Details 3)
Leases (Details 3) | Nov. 30, 2021USD ($) |
Leases | |
2022 | $ 42,767 |
2023 | 57,023 |
2024 | 57,023 |
Thereafter | 206,234 |
Total minimum lease payments | 363,047 |
Less: amount of lease payments representing effects of discounting | (135,267) |
Present value of future minimum lease payments | 227,780 |
Less current obligations under leases | (24,495) |
Lease liabilities, net of current portion | $ 203,285 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | Aug. 10, 2021 | Nov. 30, 2021 | Nov. 30, 2020 | Aug. 31, 2021 |
Leases | ||||
Operating lease assets and liabilities | $ 82,398 | |||
Land purchase | 920,000 | |||
Monthly payments | $ 2,647 | $ 4,501 | ||
Lease liabilities | $ 104,902 | $ 70,705 | ||
Lease term | 5 years | 10 years | ||
Weighted average discount rate operating leases | 15.00% | |||
Loss on lease termination | $ 0 | $ 65,566 | ||
Weighted average remaining operating lease term | 6 years 8 months 4 days |
Loans payable (Details Narrativ
Loans payable (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||||||||
Jul. 25, 2021 | Apr. 30, 2021 | Apr. 29, 2021 | Mar. 31, 2021 | Mar. 26, 2021 | Jan. 24, 2021 | Nov. 20, 2020 | Jun. 20, 2020 | Nov. 30, 2021 | Nov. 30, 2020 | May 29, 2020 | |
Initialy payment for building | $ 71,023 | ||||||||||
Monthly interest payments | $ 37,613 | ||||||||||
Repayment of Principal Amount | $ 1,253,772 | ||||||||||
Promissory note, description | As present value of the cash flows under the new debt instrument differed by more than 10% from the present value of the remaining cash flows under the terms of the original debt instrument | ||||||||||
Maturity date | Jan. 25, 2022 | Oct. 31, 2021 | Oct. 29, 2021 | Sep. 26, 2021 | |||||||
SECFAC Exchange Corp [Member] | |||||||||||
Debt instrument share issued upon additional compensation | 100,000 | ||||||||||
Accertion on promissory notes | $ 90,000 | ||||||||||
Fair value of debt instrument | 90,000 | ||||||||||
March 1, 2021 [Member] | |||||||||||
Final payment on promissory notes | $ 42,750 | $ 315,000 | |||||||||
Interest rate | 10.00% | ||||||||||
Interest paid on promissory notes | $ 15,000 | ||||||||||
Maturity date | Jun. 1, 2021 | ||||||||||
June 2020 [Member] | |||||||||||
Purchase price of Building | $ 1,253,772 | ||||||||||
Interest paid on loans for purchase of buildings | $ 112,839 | $ 112,840 | |||||||||
Acquisition Agreement [Member] | Promissory Note [Member] | |||||||||||
Debt instrument share issued, shares | 200,000 | ||||||||||
Debt instrument share issued, amount | $ 85,500 | ||||||||||
Fair value of common stock | $ 74,000 | ||||||||||
Promissory note, description | The note is non-interest bearing and is due 10 days after demand. | ||||||||||
Final payment on promissory notes | $ 42,750 |
Secured convertible notes pay_2
Secured convertible notes payable (Details Narrative) - USD ($) | Nov. 02, 2021 | Oct. 02, 2021 | Jan. 07, 2021 | Nov. 11, 2020 | Jul. 25, 2021 | Apr. 30, 2021 | Apr. 29, 2021 | Mar. 31, 2021 | Mar. 26, 2021 | Mar. 22, 2021 | Jan. 06, 2021 | Dec. 02, 2020 | Oct. 26, 2020 | Sep. 29, 2020 | Jun. 30, 2020 | Jan. 23, 2020 | Nov. 30, 2021 | Aug. 31, 2020 | Nov. 01, 2021 | Oct. 25, 2021 | Oct. 01, 2021 |
Fair value of warrants | $ 37,679 | $ 43,914 | $ 142,564 | $ 17,437 | $ 78,011 | $ 117,533 | |||||||||||||||
Issued convertible note with face value | $ 100,000 | $ 300,000 | $ 180,000 | ||||||||||||||||||
Warrants to purchase common stock | 180,000 | 100,000 | |||||||||||||||||||
Simple interest rate | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |||||||||||||||
Warrant exercise price | $ 1 | $ 1 | $ 0.50 | $ 1.25 | |||||||||||||||||
Conversion price | $ 0.70 | $ 1.25 | $ 1 | $ 1 | $ 1.25 | $ 1.25 | $ 0.65 | $ 0.98 | $ 0.40 | $ 0.40 | |||||||||||
Common shares issued upon debt conversion | 8,268 | ||||||||||||||||||||
Description of debt instrument | As present value of the cash flows under the new debt instrument differed by more than 10% from the present value of the remaining cash flows under the terms of the original debt instrument | ||||||||||||||||||||
Fair values of the convertible note | $ 39,573 | $ 40,117 | |||||||||||||||||||
Fair value of warrants | 60,427 | 59,883 | |||||||||||||||||||
Beneficial conversion feature | $ 1,090 | $ 85,330 | $ 115,383 | ||||||||||||||||||
Carrying value of the convertible debt | $ 1,546 | 364,517 | |||||||||||||||||||
Fair value of beneficial conversion feature | $ 115,383 | ||||||||||||||||||||
Shares issuable | 16,000 | ||||||||||||||||||||
Purchase additional common shares | 320,000 | ||||||||||||||||||||
Convertible debt | 33,910 | $ 364,517 | $ 14,533 | ||||||||||||||||||
Fair value of debt amount extingushed | $ 8,268 | ||||||||||||||||||||
Convertible debt discounted | 108,100 | ||||||||||||||||||||
Accrued interest included in accounts payable and accrued liabilities | 144 | 10,603 | 1,644 | ||||||||||||||||||
Fair value of embedded beneficial conversion feature | $ 467 | ||||||||||||||||||||
Accrued interest | 1,208 | $ 6,822 | 5,863 | 986 | |||||||||||||||||
Interest paid | 26,630 | ||||||||||||||||||||
Face value of convertible note | $ 48,258 | $ 15,000 | 56,086 | 457,436 | 85,330 | 470,467 | 100,000 | 40,117 | |||||||||||||
Convertible note interest rate percentage | 10.00% | ||||||||||||||||||||
Additional paid in capital, fair value of warrants | 37,679 | 7,904 | 22,564 | $ 17,437 | $ 78,011 | 108,100 | 60,427 | 59,883 | |||||||||||||
Repayment Convertible notes payable | $ 200,000 | 600,000 | |||||||||||||||||||
Convertible notes, principal amounts | $ 35,000 | $ 100,000 | $ 100,000 | $ 100,000 | 600,000 | $ 39,573 | $ 0 | ||||||||||||||
Maturity date | Jan. 25, 2022 | Oct. 31, 2021 | Oct. 29, 2021 | Sep. 26, 2021 | |||||||||||||||||
Outstanding note payable | 163,341 | $ 200,000 | |||||||||||||||||||
Gain/Loss on extinguishment | $ 8,268 | $ 2,500 | (118,448) | ||||||||||||||||||
Warrants issued to purchase common shares | 100,000 | 100,000 | 100,000 | ||||||||||||||||||
Debt instrument, maturity term | 1 year | 1 year | 1 year | ||||||||||||||||||
Original issue discount on beneficial conversion feature | $ 48,258 | $ 4,016 | $ 457,436 | $ 12,000 | |||||||||||||||||
Shares received by each noteholder | 31,289,441 | ||||||||||||||||||||
Accretion expenses | $ 654,760 | $ 227,313 | |||||||||||||||||||
On March 31, 2021 [Member] | |||||||||||||||||||||
Simple interest rate | 10.00% | ||||||||||||||||||||
Common shares issued upon debt conversion | 20,000 | ||||||||||||||||||||
Accrued interest | $ 1,578 | ||||||||||||||||||||
Shares received by each noteholder | 10,000 | ||||||||||||||||||||
On July 1, 2020 [Member] | |||||||||||||||||||||
Simple interest rate | 5.00% | ||||||||||||||||||||
Warrant exercise price | $ 1.25 | ||||||||||||||||||||
Common shares issued upon debt conversion | 8,000 | ||||||||||||||||||||
Description of debt instrument | As present value of the cash flows under the new debt instrument differed by more than 10% from the present value of the remaining cash flows under the terms of the original debt instrument | ||||||||||||||||||||
Purchase additional common shares | 320,000 | ||||||||||||||||||||
Debt instrument, maturity date | Oct. 31, 2021 | ||||||||||||||||||||
Warrants issued upon debt conversion | 160,000 | ||||||||||||||||||||
On November 1, 2020 [Member] | |||||||||||||||||||||
Common shares issued upon debt conversion | 100,000 | ||||||||||||||||||||
Description of debt instrument | As present value of the cash flows under the new debt instrument differed by more than 10% from the present value of the remaining cash flows under the terms of the original debt instrument | ||||||||||||||||||||
Fair value of debt amount extingushed | $ 110,000 | ||||||||||||||||||||
Outstanding note payable | 400,000 | ||||||||||||||||||||
Gain/Loss on extinguishment | $ 110,000 | ||||||||||||||||||||
Shares received by each noteholder | 50,000 | ||||||||||||||||||||
Debt instrument, maturity date | Mar. 31, 2021 | ||||||||||||||||||||
Nine Convertible Notes [Member] | |||||||||||||||||||||
Fair value of warrants | $ 68,578 | ||||||||||||||||||||
Accrued interest | $ 30,247 | ||||||||||||||||||||
Face value of convertible note | 111,422 | ||||||||||||||||||||
Additional paid in capital, fair value of warrants | 68,578 | ||||||||||||||||||||
Original issue discount on beneficial conversion feature | $ 46,078 | ||||||||||||||||||||
Ten Convertible Notes [Member] | |||||||||||||||||||||
Fair value of warrants | $ 38,507 | ||||||||||||||||||||
Face value of convertible note | 61,493 | ||||||||||||||||||||
Additional paid in capital, fair value of warrants | $ 38,507 | ||||||||||||||||||||
Original issue discount on beneficial conversion feature | 12,000 | ||||||||||||||||||||
Eight Convertible Notes [Member] | |||||||||||||||||||||
Fair value of warrants | $ 7,904 | ||||||||||||||||||||
Warrant exercise price | $ 0.50 | ||||||||||||||||||||
Conversion price | $ 1.25 | ||||||||||||||||||||
Face value of convertible note | $ 10,096 | ||||||||||||||||||||
Additional paid in capital, fair value of warrants | 43,914 | ||||||||||||||||||||
Convertible notes, principal amounts | $ 18,000 | ||||||||||||||||||||
Maturity date | Sep. 26, 2021 | ||||||||||||||||||||
Warrants issued to purchase common shares | 18,000 | ||||||||||||||||||||
Debt instrument, maturity term | 1 year | ||||||||||||||||||||
Original issue discount on beneficial conversion feature | $ 22,314 | ||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||
Four Convertible Notes [Member] | |||||||||||||||||||||
Simple interest rate | 0.10% | 10.00% | 10.00% | 10.00% | |||||||||||||||||
Warrant exercise price | $ 1.25 | ||||||||||||||||||||
Conversion price | $ 1.25 | ||||||||||||||||||||
Accrued interest included in accounts payable and accrued liabilities | 3,184 | ||||||||||||||||||||
Accrued interest | 15,036 | ||||||||||||||||||||
Convertible notes, principal amounts | $ 37,613 | ||||||||||||||||||||
Maturity date | Apr. 23, 2021 | ||||||||||||||||||||
Warrants issued to purchase common shares | 100,000 | ||||||||||||||||||||
Debt instrument, maturity term | 2 years | ||||||||||||||||||||
Accretion expenses | $ 6,411 | ||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||
Six Convertible Notes [Member] | |||||||||||||||||||||
Warrant exercise price | $ 1.25 | ||||||||||||||||||||
Conversion price | $ 1.25 | ||||||||||||||||||||
Accrued interest | 59,671 | ||||||||||||||||||||
Convertible notes, principal amounts | $ 600,000 | ||||||||||||||||||||
Maturity date | Apr. 23, 2021 | ||||||||||||||||||||
Debt instrument, maturity term | 2 years | ||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||
Seven Convertible Notes [Member] | |||||||||||||||||||||
Conversion price | $ 1.25 | ||||||||||||||||||||
Accrued interest | 19,398 | ||||||||||||||||||||
Convertible notes, principal amounts | $ 300,000 | ||||||||||||||||||||
Maturity date | Apr. 23, 2021 | ||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||
Five Convertible Notes [Member] | |||||||||||||||||||||
Warrant exercise price | $ 1.25 | ||||||||||||||||||||
Conversion price | $ 1.25 | ||||||||||||||||||||
Accrued interest included in accounts payable and accrued liabilities | $ 9,041 | 4,122 | |||||||||||||||||||
Accrued interest | 2,236 | ||||||||||||||||||||
Convertible notes, principal amounts | $ 85,937 | ||||||||||||||||||||
Maturity date | May 9, 2021 | ||||||||||||||||||||
Warrants issued to purchase common shares | 68,750 | ||||||||||||||||||||
Debt instrument, maturity term | 2 years | ||||||||||||||||||||
Accretion expenses | 12,026 | ||||||||||||||||||||
Interest rate | 10.00% | 10.00% | |||||||||||||||||||
Three Convertible Notes [Member] | |||||||||||||||||||||
Warrant exercise price | $ 1.25 | ||||||||||||||||||||
Conversion price | $ 1.25 | ||||||||||||||||||||
Accrued interest | 19,109 | ||||||||||||||||||||
Convertible notes, principal amounts | $ 163,341 | ||||||||||||||||||||
Maturity date | Mar. 27, 2021 | ||||||||||||||||||||
Warrants issued to purchase common shares | 130,673 | ||||||||||||||||||||
Debt instrument, maturity term | 2 years | ||||||||||||||||||||
Accretion expenses | $ 37,046 | ||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||
Two Convertible Notes [Member] | |||||||||||||||||||||
Warrant exercise price | $ 1.25 | ||||||||||||||||||||
Conversion price | $ 1.25 | ||||||||||||||||||||
Repayment Convertible notes payable | $ 600,000 | ||||||||||||||||||||
Convertible notes, principal amounts | $ 400,000 | ||||||||||||||||||||
Maturity date | Jul. 20, 2020 | ||||||||||||||||||||
Warrants issued to purchase common shares | 240,000 | ||||||||||||||||||||
Interest rate | 10.00% | ||||||||||||||||||||
Convertible notes, principal amounts 1 | $ 200,000 | ||||||||||||||||||||
Debt discount | $ 12,000 | ||||||||||||||||||||
Convertible Debt [Member] | |||||||||||||||||||||
Description of debt instrument | As present value of the cash flows under the new debt instrument differed by more than 10% from the present value of the remaining cash flows under the terms of the original debt instrument | ||||||||||||||||||||
Fair value of debt amount extingushed | $ 20,000 | ||||||||||||||||||||
Outstanding note payable | 400,000 | ||||||||||||||||||||
Gain/Loss on extinguishment | 20,000 | ||||||||||||||||||||
Consideration of extending the convertible notes | 400,000 | ||||||||||||||||||||
Fair value of the common share and warrants | $ 218,397 | ||||||||||||||||||||
Eleven Convertible Notes [Member] | |||||||||||||||||||||
Warrant exercise price | $ 0.50 | ||||||||||||||||||||
Conversion price | $ 1.25 | $ 0.95 | |||||||||||||||||||
Accrued interest included in accounts payable and accrued liabilities | $ 59,671 | ||||||||||||||||||||
Additional paid in capital, fair value of warrants | $ 18,000 | $ 142,564 | |||||||||||||||||||
Convertible notes, principal amounts | $ 18,000 | ||||||||||||||||||||
Interest rate | 10.00% | 10.00% | |||||||||||||||||||
Debt discount | $ 0 | ||||||||||||||||||||
Face value of convertible note | 457,436 | ||||||||||||||||||||
Original issue discount on beneficial conversion featuree | $ 457,436 |
Equity (Detail Narrative)
Equity (Detail Narrative) - USD ($) | Nov. 05, 2021 | Sep. 02, 2021 | Oct. 20, 2021 | Nov. 30, 2021 | Nov. 30, 2020 | Aug. 31, 2021 | Aug. 31, 2020 |
Expense consulting fees | $ 159,374 | $ 425,000 | |||||
Common stock issued to investors | 268,000 | ||||||
Subscription fee received | $ 224,664 | ||||||
Subscription receivable | $ 250,000 | ||||||
Common stock shares issued | 91,666,131 | 79,858,867 | |||||
Common stock shares reissued | 750,000 | ||||||
fair value -consulting services | $ 637,500 | ||||||
Deferred compensation | $ 53,126 | ||||||
Proceed from issuance of common shares | 2,140,861 | $ 250,000 | |||||
Finders fee | $ 206,043 | ||||||
On November 5, 2021 [Member] | |||||||
Common stock shares issued | 705,000 | 8,000 | |||||
Proceed from issuance of common shares | $ 528,750 | ||||||
Price Per Shares | $ 0.75 | ||||||
Finders fee | $ 6,000 | ||||||
Other's finder fee | $ 41,654 | ||||||
September 30, 2020 [Member] | |||||||
Common stock shares issued | 120,000 | ||||||
Common stock issuable | 129,952 | 19,952 | |||||
Proceed from issuance of common shares | $ 150,000 | ||||||
Price Per Shares | $ 1.25 | ||||||
On October 20, 2021 [Member] | |||||||
Common stock shares issued | 3,753,094 | ||||||
Proceed from issuance of common shares | $ 2,814,821 | ||||||
Price Per Shares | $ 0.75 | $ 0.75 | |||||
Amount received for purchase of shares | $ 790,467 | $ 85,146 | |||||
Account receivable | 250,000 | ||||||
Commission fees | $ 205,735 | ||||||
On September 2, 2021 [Member] | |||||||
Common stock shares issued | 2,997,237 | ||||||
Proceed from issuance of common shares | $ 3,371,892 | ||||||
On September 2, 2022 [Member] | |||||||
Common stock shares issued | 2,175,933 | ||||||
Proceed from issuance of common shares | $ 2,447,925 | ||||||
Fair value of common share | $ 2,137,500 |
Related party transactions an_3
Related party transactions and balances (Details) - USD ($) | 3 Months Ended | |
Nov. 30, 2021 | Nov. 30, 2020 | |
Related party transactions and balances | ||
Consulting fees and benefits | $ 91,986 | $ 88,865 |
Related party transactions an_4
Related party transactions and balances (Details 1) - USD ($) | Nov. 30, 2021 | Aug. 31, 2021 |
Amounts due from related party | $ (176,717) | $ (176,483) |
CEO and Director [Member] | ||
Amounts due from related party | (61,796) | (65,254) |
COO and Director [Member] | ||
Amounts due from related party | (76,960) | (76,574) |
CFO [Member] | ||
Amounts due from related party | $ (37,961) | $ (34,655) |
Related party transactions an_5
Related party transactions and balances (Details Narrative) - USD ($) | Sep. 02, 2021 | Nov. 30, 2021 | Aug. 31, 2021 |
Due to related party | $ 176,717 | $ 176,483 | |
Common stock issued | 91,666,131 | 79,858,867 | |
CEO and Director [Member] | |||
Fair value of common share | $ 1,997,925 | ||
Common stock issued | 1,775,933 | ||
CFO [Member] | |||
Fair value of common share | $ 450,000 | ||
Common stock issued | 400,000 |
Financial risk factors (Details
Financial risk factors (Details) - USD ($) | Nov. 30, 2021 | Aug. 31, 2021 |
Cash and cash equivalents | $ 275,529 | $ 419,825 |
Canadian dollar exchange rate [Member] | ||
Cash and cash equivalents | 70,163 | |
Accounts payable | (454,262) | |
Net exposure | 0 | |
Balance in US dollars | $ (384,099) |
Financial risk factors (Detai_2
Financial risk factors (Details 1) - Colombian Peso exchange rate [Member] | Nov. 30, 2021USD ($) |
Cash and cash equivalents | $ 281,751,039 |
Other receivables | 83,072,204 |
Accounts payable | (3,170,820,800) |
Net exposure | (2,805,997,557) |
Balance in US dollars | $ (702,870) |
Financial risk factors (Detai_3
Financial risk factors (Details Narrative) - USD ($) | 3 Months Ended | |
Nov. 30, 2021 | Nov. 30, 2020 | |
Net losses | $ (11,485,246) | $ (6,607,763) |
Canadian dollar exchange rate [Member] | ||
Net losses | $ 38,410 | 35,296 |
Exchange rate | 10.00% | |
Colombian Peso exchange rate [Member] | ||
Net losses | $ 70,287 | $ 74,408 |
Exchange rate | 10.00% |
Commitments (Details Narrative)
Commitments (Details Narrative) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Jun. 30, 2020USD ($) | Nov. 30, 2021USD ($) | Nov. 30, 2020USD ($) | Aug. 31, 2021USD ($) | Aug. 31, 2020USD ($) | Aug. 30, 2019CAD ($) | |
Contingent liability | $ 547,190 | |||||||
Settlement payments | $ 105,000 | $ 108,500 | $ 0 | |||||
Accounts payable and accrued liabilities | $ 90,000 | |||||||
Construction payable | 208,279 | |||||||
Remaining balance | $ 163,341 | $ 200,000 | ||||||
Construction agreement [Member] | ||||||||
Construction cost | $ 437,673 | 319,240 | ||||||
Remaining balance | 111,032 | |||||||
Deposit | 77,829 | |||||||
Sales Agreement [Member] | ||||||||
Deposits and advances | $ 233,496 | |||||||
Equipment | $ 658,260 |
Share purchase warrants (Detail
Share purchase warrants (Details) | 3 Months Ended |
Nov. 30, 2021$ / sharesshares | |
Weighted average exercise price | |
Weighted average exercise price, Ending balance | $ 0.78 |
Warrants [Member] | |
Weighted average exercise price | |
Number of warrants, Beginning balance | shares | 3,663,135 |
Number of warrants, issued | shares | 3,717,666 |
Number of warrants, expired | shares | (320,000) |
Ending balance | shares | 7,060,801 |
Weighted average exercise price, Beginning balance | $ 1.21 |
Weighted average exercise price, issued | 1.25 |
Weighted average exercise price, expired | 1.25 |
Weighted average exercise price, Ending balance | $ 1.23 |
Share purchase warrants (Deta_2
Share purchase warrants (Details 1) - $ / shares | Nov. 30, 2021 | Oct. 01, 2021 | Apr. 30, 2021 | Apr. 29, 2021 | Mar. 26, 2021 |
Weighted average exercise price | $ 1.25 | $ 1 | $ 1 | $ 0.50 | |
Warrant 1 [Member] | |||||
Number of warrants | 130,673 | ||||
Weighted average exercise price | $ 1.25 | ||||
Expiry date | Sep. 29, 2022 | ||||
Warrant 2 [Member] | |||||
Number of warrants | 30,090 | ||||
Weighted average exercise price | $ 1.25 | ||||
Expiry date | Oct. 16, 2022 | ||||
Warrant 3 [Member] | |||||
Number of warrants | 68,750 | ||||
Weighted average exercise price | $ 1.25 | ||||
Expiry date | Nov. 11, 2022 | ||||
Warrant 4 [Member] | |||||
Number of warrants | 240,000 | ||||
Weighted average exercise price | $ 1.25 | ||||
Expiry date | Nov. 28, 2022 | ||||
Warrant 5 [Member] | |||||
Number of warrants | 118,000 | ||||
Weighted average exercise price | $ 0.50 | ||||
Expiry date | Mar. 26, 2022 | ||||
Warrant 6 [Member] | |||||
Number of warrants | 180,000 | ||||
Weighted average exercise price | $ 1 | ||||
Expiry date | Apr. 29, 2022 | ||||
Warrant 7 [Member] | |||||
Number of warrants | 1,446,666 | ||||
Weighted average exercise price | $ 1.25 | ||||
Expiry date | Jun. 11, 2023 | ||||
Warrant 8 [Member] | |||||
Number of warrants | 50,000 | ||||
Weighted average exercise price | $ 1.25 | ||||
Expiry date | Jul. 17, 2023 | ||||
Warrant 9 [Member] | |||||
Number of warrants | 103,956 | ||||
Weighted average exercise price | $ 1.25 | ||||
Expiry date | Jul. 26, 2023 | ||||
Warrant 10 [Member] | |||||
Number of warrants | 200,000 | ||||
Weighted average exercise price | $ 1.25 | ||||
Expiry date | Aug. 18, 2023 | ||||
Warrant 11 [Member] | |||||
Number of warrants | 775,000 | ||||
Weighted average exercise price | $ 1.25 | ||||
Expiry date | Aug. 28, 2023 | ||||
Warrant 12 [Member] | |||||
Number of warrants | 100,000 | ||||
Weighted average exercise price | $ 1.25 | ||||
Expiry date | Oct. 1, 2023 | ||||
Warrant 13 [Member] | |||||
Number of warrants | 2,812,666 | ||||
Weighted average exercise price | $ 1.25 | ||||
Expiry date | Oct. 20, 2023 | ||||
Warrant 14 [Member] | |||||
Number of warrants | 100,000 | ||||
Weighted average exercise price | $ 1.25 | ||||
Expiry date | Oct. 25, 2023 | ||||
Warrant 15 [Member] | |||||
Number of warrants | 705,000 | ||||
Weighted average exercise price | $ 1.25 | ||||
Expiry date | Nov. 6, 2023 |
Stock options (Details)
Stock options (Details) | 3 Months Ended |
Nov. 30, 2021USD ($)$ / sharesshares | |
Stock Options | |
Number of shares, Beginning balance | 4,450,000 |
Number of options, granted | 100,000 |
Number of shares, Ending balance | 4,550,000 |
Number of options, Exercisable balance | 1,583,333 |
Weighted Average exercise price, beginning | $ / shares | $ 0.77 |
Weighted Average exercise price, granted | $ / shares | 1.125 |
Weighted Average exercise price, Ending balance | $ / shares | 0.78 |
Weighted Average exercise price, exercisable balance | $ / shares | $ 0.79 |
Weighted average contractual term, beginning | 4 years 5 months 1 day |
Weighted average contractual term, granted | 4 years 9 months 3 days |
Weighted average contractual term, outstanding | 4 years 2 months 8 days |
Weighted average contractual term, exercisable | 4 years 2 months 15 days |
Aggregate Intrinsic value, beginning balance | 1,334,000 |
Aggregate Intrinsic value, ending balance | $ | $ 5,014,000 |
Aggregate Intrinsic value, exercisable balance | 1,721,667 |
Stock options (Details 1)
Stock options (Details 1) | 3 Months Ended | |
Nov. 30, 2021 | Nov. 30, 2020 | |
Stock Options | ||
Expected dividend yield | 0.00% | 0.00% |
Expected volatility | 166.00% | 0.00% |
Expected life (in years) | 5 years | |
Risk-free interest rate | 0.78% | 0.00% |
Stock options (Details Narrativ
Stock options (Details Narrative) | 3 Months Ended |
Nov. 30, 2021USD ($) | |
Unrecognized compensation costs | $ 765,815 |
Stock based compensation | 531,255 |
Directors And Officers [Member] | February 1, 2021 [Member] | |
Stock based compensation | $ 531,255 |
Noncash activities (Details)
Noncash activities (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Jul. 25, 2021 | Sep. 29, 2020 | Nov. 30, 2021 | Nov. 30, 2020 | |
Beneficial conversion feature | $ 1,090 | $ 85,330 | $ 115,383 | |
Non-Cash Activities [Member] | ||||
Shares issued from treasury for services and bonuses | 7,957,316 | $ 0 | ||
Beneficial conversion feature | 80,247 | 153,764 | ||
Relative fair value of warrants issued with convertible note | 120,310 | 133,127 | ||
Relative fair value of shares issued on modification of convertible note | $ 0 | $ 110,000 |
Segment disclosure (Details)
Segment disclosure (Details) - USD ($) | 3 Months Ended | ||
Nov. 30, 2021 | Nov. 30, 2020 | Aug. 31, 2021 | |
Net sales | $ 10,082 | ||
Net loss for the period | (10,068,081) | $ (1,195,862) | |
Accretion | 132,033 | ||
Depreciation and amortization | 13,299 | ||
Total assets | 4,847,584 | $ 4,633,775 | |
Allied [Member] | |||
Net sales | (4,679) | ||
Net loss for the period | (9,662,598) | ||
Accretion | 132,033 | ||
Depreciation and amortization | 0 | ||
Total assets | 3,617,195 | ||
Allied Colombia [Member] | |||
Net sales | 14,761 | ||
Net loss for the period | (405,483) | ||
Accretion | 0 | ||
Depreciation and amortization | 13,299 | ||
Total assets | $ 1,230,389 |
Segment disclosure (Details 2)
Segment disclosure (Details 2) | 3 Months Ended |
Nov. 30, 2021USD ($) | |
Total long lived assets | $ 4,847,584 |
Revenue | 10,081 |
Canada [Member] | |
Total long lived assets | 3,617,195 |
Colombia [Member] | |
Total long lived assets | 1,230,389 |
Revenue | $ 10,081 |
Subsequent events (Details Narr
Subsequent events (Details Narrative) - USD ($) | Aug. 10, 2021 | Mar. 30, 2021 | Nov. 30, 2021 | Jan. 11, 2022 | Dec. 31, 2021 | Dec. 23, 2021 | Oct. 25, 2021 | Oct. 01, 2021 | Aug. 31, 2021 | Jul. 25, 2021 | Jul. 02, 2021 | Apr. 30, 2021 | Apr. 29, 2021 | Mar. 26, 2021 | Nov. 11, 2020 | Oct. 26, 2020 | Sep. 29, 2020 | Jun. 30, 2020 |
Monthly Payments | $ 37,613 | |||||||||||||||||
Descripton Monthly Payments | For the remaining 24 months, the Company will make monthly payments of $66,288. If the first 6 monthly payments are made on time, the Company may prepay the unamortized loan balance with a 2% penalty of the remaining balance. | |||||||||||||||||
Common unit issued | 3,517,666 | |||||||||||||||||
Common unit per share | $ 0.75 | |||||||||||||||||
Proceeds from issuance of common stock | $ 2,638,250 | |||||||||||||||||
Finder's fee | $ 206,043 | |||||||||||||||||
Subsequent description | Each unit consists of one common share of the Company and one warrant to purchase the Company’s one common share at $1.25 for a period of two years. | |||||||||||||||||
Lease term | 5 years | 10 years | ||||||||||||||||
Warrants exercised price | $ 1.25 | $ 1 | $ 1 | $ 0.50 | ||||||||||||||
Conversion price | $ 0.98 | $ 0.40 | $ 0.40 | $ 1.25 | $ 1 | $ 1 | $ 1.25 | $ 0.70 | $ 1.25 | $ 0.65 | ||||||||
2022 | $ 42,767 | |||||||||||||||||
2023 | 57,023 | |||||||||||||||||
2024 | $ 57,023 | |||||||||||||||||
Convertible notes, principal amounts | $ 39,573 | $ 0 | $ 35,000 | $ 100,000 | $ 100,000 | $ 100,000 | $ 600,000 | |||||||||||
Common stock issued | 91,666,131 | 79,858,867 | ||||||||||||||||
Subscription fee received | $ 224,664 | |||||||||||||||||
Common stock share price | $ 0.0001 | $ 0.0001 | ||||||||||||||||
North Las Vegas [Member] | ||||||||||||||||||
2022 | $ 1,500 | |||||||||||||||||
2023 | 1,800 | |||||||||||||||||
2024 | 2,025 | |||||||||||||||||
2025 | 2,280 | |||||||||||||||||
2026 | $ 2,565 | |||||||||||||||||
October 25, 2021 [Member] | ||||||||||||||||||
Warrants exercised price | 1.25 | |||||||||||||||||
Conversion price | $ 1 | |||||||||||||||||
Convertible notes, principal amounts | $ 100,000 | |||||||||||||||||
Warrant to purchase shares | 100,000 | |||||||||||||||||
Interest rate | 1.00% | |||||||||||||||||
Asset Purchase Agreement [Member] | ||||||||||||||||||
Promissory note issued | $ 150,000 | |||||||||||||||||
Liabilities | $ 1,350,000 | |||||||||||||||||
Short Term Applicable Federal Rate | 0.11% | |||||||||||||||||
Amendment Agreements [Member] | October 1, 2021 [Member] | ||||||||||||||||||
Lease term | 1 year | |||||||||||||||||
Warrants exercised price | $ 1.25 | |||||||||||||||||
Convertible notes, principal amounts | $ 10,000 | |||||||||||||||||
Warrant to purchase shares | 100,000 | |||||||||||||||||
Interest rate | 1.00% | |||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||
Common stock issued | 36,000 | |||||||||||||||||
Subscription fee received | $ 27,000 | |||||||||||||||||
Common stock share price | $ 0.75 | |||||||||||||||||
Subsequent Event [Member] | Secured Debt [Member] | ||||||||||||||||||
Conversion price | $ 1.25 | |||||||||||||||||
Convertible notes, principal amounts | $ 150,000 | |||||||||||||||||
Interest rate | 10.00% | |||||||||||||||||
Convertible Debt [Member] | Subsequent Event [Member] | ||||||||||||||||||
Conversion price | $ 1.25 | |||||||||||||||||
Convertible notes, principal amounts | $ 200,000 | |||||||||||||||||
Interest rate | 10.00% |