Cover
Cover - USD ($) | 12 Months Ended | ||
Aug. 31, 2022 | Dec. 14, 2022 | Feb. 28, 2022 | |
Cover [Abstract] | |||
Entity Registrant Name | INNOVATION1 BIOTECH INC | ||
Entity Central Index Key | 0001629205 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --08-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Aug. 31, 2022 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Entity Common Stock Shares Outstanding | 20,020,239 | ||
Entity Public Float | $ 6,243,650 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 000-55852 | ||
Entity Incorporation State Country Code | NV | ||
Entity Tax Identification Number | 82-2275255 | ||
Entity Address Address Line 1 | 40 Wall Street | ||
Entity Address Address Line 2 | Suite 2701 | ||
City Area Code | 646 | ||
Local Phone Number | 380-1923 | ||
Entity Interactive Data Current | Yes | ||
Entity Address City Or Town | New York | ||
Entity Address State Or Province | NY | ||
Entity Address Postal Zip Code | 10005 | ||
Auditor Firm Id | 5525 | ||
Auditor Location | Spokane, Washington | ||
Auditor Name | Fruci & Associates II, PLLC |
Balance Sheets
Balance Sheets - USD ($) | Aug. 31, 2022 | Aug. 31, 2021 |
Current assets: | ||
Cash | $ 156,486 | $ 137,476 |
Accounts receivable | 56,421 | 0 |
Inventory | 0 | 17,000 |
Prepaid expenses | 74,049 | 14,000 |
Total current assets | 286,956 | 168,476 |
Other assets | ||
Equity investment, net of discount | 0 | 11,132 |
Equipment, net | 2,615 | 598 |
Trademarks | 1,680 | 1,680 |
Intangibles | 42,980,076 | 0 |
ROU Asset | 482,086 | 0 |
Security Deposit | 210,000 | 0 |
Total other assets | 43,676,457 | 13,410 |
Total Assets | 43,963,413 | 181,886 |
Current liabilities: | ||
Accounts payable | 108,880 | 41,874 |
Accrued expenses | 156,535 | 2,056 |
Mioxal liability, current portion | 28,500,000 | 0 |
Related party payable | 0 | 64,600 |
Lease Liability, current portion | 199,203 | 0 |
Note payable, current portion | 10,000 | 160,000 |
Dividends payable | 837,798 | 138,195 |
Total current liabilities | 29,812,416 | 406,725 |
Long term liabilities: | ||
Lease liability | 298,423 | 0 |
Mioxal liability | 11,000,000 | 0 |
Total long term liabilities | 11,298,423 | 0 |
Total liabilities | 41,110,839 | 406,725 |
Commitments and contingencies | 0 | 0 |
Stockholders' equity (deficiency): | ||
Common stock to be issued | 0 | 0 |
Common stock, $0.001 par value; 200,000,000 shares authorized; 20,020,239 and 188,616 shares issued and outstanding as of August 31, 2022 and August 31, 2021, respectively | 20,020 | 188 |
Additional paid in capital | 47,375,512 | 2,745,906 |
Accumulated deficit | (44,551,043) | (2,973,628) |
Total stockholders' equity (deficiency) | 2,852,574 | (224,839) |
Total Liabilities and Stockholders' equity | 43,963,413 | 181,886 |
Preferred stock Series A [Member] | ||
Stockholders' equity (deficiency): | ||
Preferred stock, Value | 0 | 0 |
Preferred stock Series B [Member] | ||
Stockholders' equity (deficiency): | ||
Preferred stock, Value | 2,695 | 2,695 |
Series B-1 Preferred Stock [Member] | ||
Stockholders' equity (deficiency): | ||
Preferred stock, Value | $ 5,389 | $ 0 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Aug. 31, 2022 | Aug. 31, 2021 |
Common stock, shares par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 2,000,000 |
Common stock, shares issued | 20,020,239 | 188,616 |
Common stock, shares outstanding | 20,020,239 | 188,616 |
Preferred stock Series A [Member] | ||
Preferred stock, shares par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 22,305,486 | 22,305,486 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Preferred stock Series B [Member] | ||
Preferred stock, shares par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,695,514 | 2,695,514 |
Preferred stock, shares issued | 2,694,514 | 2,694,514 |
Preferred stock, shares outstanding | 2,694,514 | 2,694,514 |
Series B-1 Preferred Stock [Member] | ||
Preferred stock, shares par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,389,028 | 5,389,028 |
Preferred stock, shares issued | 5,389,028 | 0 |
Preferred stock, shares outstanding | 5,389,028 | 0 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Statements of Operations | ||
Revenue | $ 0 | $ 3,080 |
Cost of Revenue | 0 | 1,421 |
Gross margin | 0 | 1,659 |
Operating expenses: | ||
Advertising | 4,914 | 677 |
Consulting fees | 398,033 | 73,375 |
General and administrative | 362,359 | 49,184 |
Professional fees | 477,392 | 117,414 |
Research and development | 201,165 | 0 |
Salaries | 1,259,519 | 0 |
Impairment expense | 35,780,148 | 19,450 |
Depreciation and amortization expense | 2,546,362 | 0 |
Total operating expenses | 41,029,893 | 260,100 |
Net operating income (loss) | (41,029,893) | (258,441) |
Other (income) expense: | ||
Interest expense | 5,514 | 105,424 |
Interest income | (13,638) | (55,567) |
Gain on change in fair value of derivative liability | 0 | (1,454,480) |
Interest accretion on convertible notes payable | 0 | 114,599 |
Gain on extinguishment of debt | (143,956) | 0 |
Other (income) expense | 0 | (8,349) |
Total Other (income) expense | (152,080) | (1,298,373) |
Net income (loss) | (40,877,813) | 1,039,932 |
Preferred Dividends | (699,602) | 0 |
Net income (loss) available to common shareholders | $ (41,577,415) | $ 1,039,932 |
Basic income (loss) per share | $ (2.73) | $ 5.53 |
Weighted average number of common shares outstanding - basic | 15,225,781 | 188,094 |
Statements of Stockholders' Equ
Statements of Stockholders' Equity (Deficit) - USD ($) | Total | Series B1 Preferred Stock [Member] | Series A, Preferred Stock | Series B, Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit |
Balance, shares at Aug. 31, 2020 | 8,480,000 | 187,194 | |||||
Balance, amount at Aug. 31, 2020 | $ (2,678,007) | $ 0 | $ 8,480 | $ 0 | $ 187 | $ 1,157,253 | $ (3,843,927) |
Dividends on preferred stock accrued | (12,575) | 0 | 0 | 0 | 0 | 0 | (12,575) |
Net loss | (237,268) | 0 | $ 0 | 0 | $ 0 | 0 | (237,268) |
Balance, shares at Nov. 30, 2020 | 8,480,000 | 187,194 | |||||
Balance, amount at Nov. 30, 2020 | (2,927,850) | 0 | $ 8,480 | 0 | $ 187 | 1,157,253 | (4,093,770) |
Balance, shares at Aug. 31, 2020 | 8,480,000 | 187,194 | |||||
Balance, amount at Aug. 31, 2020 | (2,678,007) | 0 | $ 8,480 | $ 0 | $ 187 | 1,157,253 | (3,843,927) |
Net loss | 1,039,932 | ||||||
Common Stock issued for asset purchase, amount | 40,654,827 | ||||||
Balance, shares at Aug. 31, 2021 | 2,694,514 | 188,616 | |||||
Balance, amount at Aug. 31, 2021 | (224,839) | 0 | $ 0 | $ 2,695 | $ 188 | 2,745,906 | (2,973,628) |
Balance, shares at Nov. 30, 2020 | 8,480,000 | 187,194 | |||||
Balance, amount at Nov. 30, 2020 | (2,927,850) | 0 | $ 8,480 | 0 | $ 187 | 1,157,253 | (4,093,770) |
Dividends on preferred stock accrued | (12,575) | 0 | 0 | 0 | 0 | 0 | (12,575) |
Net loss | 557,950 | 0 | 0 | 0 | $ 0 | 0 | 557,950 |
Adjustment for reverse split, shares | 1,422 | ||||||
Adjustment for reverse split, amount | 0 | 0 | $ 0 | 0 | $ 1 | (1) | 0 |
Balance, shares at Feb. 28, 2021 | 8,480,000 | 188,616 | |||||
Balance, amount at Feb. 28, 2021 | (2,382,475) | 0 | $ 8,480 | 0 | $ 188 | 1,157,252 | (3,548,395) |
Dividends on preferred stock accrued | (38,649) | 0 | 0 | 0 | 0 | 0 | (38,649) |
Net loss | 796,156 | 0 | $ 0 | $ 0 | 0 | 0 | 796,156 |
Exchange agreement, shares | (8,480,000) | 2,694,514 | |||||
Exchange agreement, amount | 1,582,869 | 0 | $ (8,480) | $ 2,695 | $ 0 | 1,588,654 | 0 |
Balance, shares at May. 31, 2021 | 2,694,514 | 188,616 | |||||
Balance, amount at May. 31, 2021 | (42,099) | 0 | 0 | $ 2,695 | $ 188 | 2,745,906 | (2,790,888) |
Dividends on preferred stock accrued | (105,834) | 0 | 0 | 0 | 0 | 0 | (105,834) |
Net loss | (873,062) | 0 | 0 | $ 0 | $ 0 | 0 | (873,062) |
Balance, shares at Aug. 31, 2021 | 2,694,514 | 188,616 | |||||
Balance, amount at Aug. 31, 2021 | (224,839) | 0 | 0 | $ 2,695 | $ 188 | 2,745,906 | (2,973,628) |
Dividends on preferred stock accrued | (136,887) | 0 | 0 | 0 | 0 | 0 | (136,887) |
Net loss | (239,853) | $ 0 | 0 | 0 | 0 | 0 | (239,853) |
Series B-1 preferred stock purchase agreements, shares | 5,389,028 | ||||||
Series B-1 preferred stock purchase agreements, amount | 4,000,000 | $ 5,389 | 0 | 0 | $ 0 | 3,994,611 | 0 |
Common Stock issued for asset purchase, shares | 19,831,623 | ||||||
Common Stock issued for asset purchase, amount | 40,654,827 | $ 0 | 0 | $ 0 | $ 19,832 | 40,634,995 | 0 |
Balance, shares at Nov. 30, 2021 | 5,389,028 | 2,694,514 | 20,020,239 | ||||
Balance, amount at Nov. 30, 2021 | 44,053,248 | $ 5,389 | 0 | $ 2,695 | $ 20,020 | 47,375,512 | (3,350,368) |
Balance, shares at Aug. 31, 2021 | 2,694,514 | 188,616 | |||||
Balance, amount at Aug. 31, 2021 | (224,839) | $ 0 | 0 | $ 2,695 | $ 188 | 2,745,906 | (2,973,628) |
Net loss | (40,877,813) | ||||||
Balance, shares at Aug. 31, 2022 | 5,389,028 | 2,694,514 | 20,020,239 | ||||
Balance, amount at Aug. 31, 2022 | 2,852,574 | $ 5,389 | 0 | $ 2,695 | $ 20,020 | 47,375,512 | (44,551,042) |
Balance, shares at Nov. 30, 2021 | 5,389,028 | 2,694,514 | 20,020,239 | ||||
Balance, amount at Nov. 30, 2021 | 44,053,248 | $ 5,389 | 0 | $ 2,695 | $ 20,020 | 47,375,512 | (3,350,368) |
Dividends on preferred stock accrued | (187,571) | 0 | 0 | 0 | 0 | 0 | (187,571) |
Net loss | (1,779,054) | $ 0 | 0 | $ 0 | $ 0 | 0 | (1,779,054) |
Balance, shares at Feb. 28, 2022 | 5,389,028 | 2,694,514 | 20,020,239 | ||||
Balance, amount at Feb. 28, 2022 | 42,086,623 | $ 5,389 | 0 | $ 2,695 | $ 20,020 | 47,375,512 | (5,316,993) |
Dividends on preferred stock accrued | (187,571) | 0 | 0 | 0 | 0 | 0 | (187,571) |
Net loss | (1,609,876) | $ 0 | 0 | $ 0 | $ 0 | 0 | (1,609,876) |
Balance, shares at May. 31, 2022 | 5,389,028 | 2,694,514 | 20,020,239 | ||||
Balance, amount at May. 31, 2022 | 40,289,176 | $ 5,389 | 0 | $ 2,695 | $ 20,020 | 47,375,512 | (7,114,440) |
Dividends on preferred stock accrued | (187,572) | 0 | 0 | 0 | 0 | 0 | (187,572) |
Net loss | (37,249,031) | $ 0 | 0 | $ 0 | $ 0 | 0 | (37,249,031) |
Balance, shares at Aug. 31, 2022 | 5,389,028 | 2,694,514 | 20,020,239 | ||||
Balance, amount at Aug. 31, 2022 | $ 2,852,574 | $ 5,389 | $ 0 | $ 2,695 | $ 20,020 | $ 47,375,512 | $ (44,551,042) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (40,877,813) | $ 1,039,932 |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 523 | 1,414 |
(Gain) Loss on change in fair value of derivative liability | 0 | (1,454,480) |
Interest accretion | 0 | 114,599 |
Amortization of ROU Asset | 137,739 | 0 |
Amortization of Mioxal Asset | 2,408,100 | 0 |
Impairment expense | 35,780,148 | 19,450 |
Gain on extinguishment of debt | (143,956) | 0 |
Realized income on investment | 0 | (8,349) |
Changes in operating assets and liabilities: | ||
Other Receivable | (56,421) | 0 |
Inventory | 0 | 1,000 |
Prepaid expenses | (270,049) | (55) |
Notes receivable | 0 | 132,852 |
Accounts payable and accrued liabilities | (41,523) | 132,101 |
Related party payable | (64,600) | (8,869) |
Net cash provided by (used in) operating activities | (3,127,852) | (30,405) |
Cash flows from investing activities: | ||
Purchase of equipment | (3,138) | 0 |
Cash paid for asset purchase | (850,000) | 0 |
Net cash used in investing activities | (853,138) | 0 |
Cash flows from financing activities | ||
Proceeds form series B-1 preferred stock purchase agreements | 4,000,000 | 0 |
Proceeds from notes payable | 0 | 150,000 |
Net cash provided by financing activities | 4,000,000 | 150,000 |
Net increase (decrease) in cash | 19,010 | 119,595 |
Cash - beginning of the period | 137,476 | 17,881 |
Cash - end of the period | 156,486 | 137,476 |
Supplemental disclosures: | ||
Interest paid | 37,802 | 0 |
Income taxes | 0 | 0 |
Non-cash investing and financing transactions: | ||
Right of use asset and lease liability | 619,825 | 0 |
Payables settled with intangible assets | 117,000 | 0 |
Preferred stock dividends accrued | 699,602 | 169,633 |
Common Stock issued for asset purchase | $ 40,654,827 | $ 0 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Aug. 31, 2022 | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | |
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS Innovation1 Biotech Inc. (the “Company”) was formed under the laws of the state of Nevada in 2014, under the name of My Cloudz, Inc. Gardiron BioNutriens completed a reverse merger with My Cloudz Inc, in October 2017 and the Company then changed its name to Gridiron BioNutrients, Inc. Effective March 31, 2022, as approved by the shareholders, the name of the Company was changed from Gridiron BioNutrients, Inc. (trading symbol GVMP) to Innovation1 Biotech Inc. (trading symbol IVBT). The Company is currently developing products using five proprietary preclinical prodrugs, all fully synthetic without connection to botanical sourcing: a mushroom-derived psychedelic molecule for treatment of post-traumatic stress disorder and depression, a novel cannabinoid and tree bark derived psychedelic for treatment of addiction and three additional novel cannabinoid prodrugs addressing clinical indications of refractory pediatric epilepsy, hypertrophic scarring and ocular inflammation. The Company has elected an August 31 st On December 22, 2020, the Company filed Articles of Amendment to its Articles of Incorporation, as amended, which were effective on January 8, 2021 (the “Effective Date”), which effected a three hundred eight for one (308:1) reverse stock split of its outstanding common stock. Change in Control On November 9, 2021, the Company completed the asset acquisition of ST Biosciences, Ltd., consisting substantially of intellectual property assets, relating to Mioxal® as discussed in Note 3 – Asset Acquisition. The closing of the acquisition resulted in a change of control of the Company. As part of the acquisition, Mr. Orr stepped down as the Company’s Chief Executive Officer and assumed the role of the Company’s Interim Chief Financial Officer. Mr. Orr has since resigned from his position and as a director. Pursuant to the terms of the Asset Purchase Agreement, Jeffrey J. Kraws was appointed as the Company’s Chief Executive Officer and a director of the Company. In addition, the Company agreed to appoint Jason Frankovich as a director of the Company subject to the Company’s compliance with Rule 14F-1 of the Exchange Act. See Note 12 Subsequent Events. Going Concern The Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company had no revenue and a net operating loss of $40,877,813 for the fiscal year ended August 31, 2022. The Company has working capital deficit of $29,525,460 and an accumulated deficit of $44,551,043 as of August 31, 2022. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for the twelve months after the issuance of this financial statement. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The ability of the Company to fully commence its operations is dependent upon, among other things, obtaining additional financing to continue operations and execution of its business plan. In response to these concerns, management plans to fund operations through additional debt and equity financing. Debt instruments may be convertible or non-convertible and will vary based on the Company’s needs and financing options available at such times. There can be no assurance that management’s plan will be successful. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Aug. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation This summary of accounting policies for Innovation1 is presented to assist in understanding the Company’s financial statements. The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting) and have been consistently applied in the preparation of the financial statements. Reclassifications Certain prior year amounts may have been reclassified for comparative purposes to conform to the current-year financial statement presentation. These reclassifications had no effect on previously reported results. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results could differ from those estimates. Estimates are used when accounting for fair value calculations, including those related to embedded conversion features of outstanding convertible notes payable. Cash and cash equivalents The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. The Company did not have any cash equivalents as of August 31, 2022 and August 31, 2021. Revenue recognition Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery. Fair Value of Financial Instruments Fair value of certain of the Company’s financial instruments including cash, prepaid expenses, accounts payable, accrued expenses, notes payable, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value investments. Fair value, as defined in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk. Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values. Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of income. The Company did not have any Level 1, Level 2 or Level 3 assets and liabilities at August 31, 2022 and August 31, 2021. Principals of Consolidation The consolidated financial statements represent the results of Innovation1 Biotech Inc., its prior wholly owned subsidiary, Gridiron Ventures – dissolved in April 2022, and the assets, processes, and results therefrom. All intercompany transactions and balances have been eliminated. All financial information has been prepared in conformity with accounting principles generally accepted in the United States of America. Inventories Inventories consist of raw materials and T-free distillate and are stated at the lower of cost or net realizable value using the first‑in, first‑out method. The Company periodically assesses the recoverability of its inventory and reduces the carrying value of the inventory when items are determined to be obsolete, defective or in excess of forecasted sales requirements. Inventory write‑downs for excess, defective and obsolete inventory are recorded as impairment expense in the accompanying statement of operations. The Company wrote-off $17,000 and $19,450 of obsolete inventory or inventory below market value for the for the years ended August 31, 2022 and 2021, respectively. A summary of the Company’s inventory as of August 31, 2022 and 2021 are as follows: Type August 31, 2022 August 31, 2021 Raw Materials $ - $ - T-free Distillate - 17,000 Total Inventory $ - $ 17,000 Property and Equipment Property and equipment are carried at cost. Expenditures for maintenance and repairs are expensed in the period incurred. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in income for the period. Depreciation is computed for financial statement purposes on a straight-line basis over estimated useful lives of the related assets and the modified accelerated cost recovery system for federal income tax purposes. The estimated useful lives of depreciable computers and other equipment are three years. With the asset acquisition as discussed in Note 3 – Asset Acquisition Intangible Assets The Company accounts for intangible assets as prescribed in ASC 350 Intangibles – Goodwill and Other, Including its evaluation for impairment on a periodic basis. The acquisition of the Mioxal intangible assets from ST Biosciences as described in Note 3 Acquisition were recorded at the acquisition cost, with the assumed debt recorded at its face value. The Company performed an evaluation of impairment at August 31, 2022, and recorded an impairment expense commensurate with the net present value of expected future cash flows, as informed by the sale of the Mioxal intangible assets and debt at November 7, 2022. Basic Income (Loss) Per Share Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. The Series B and Series B1 Convertible Preferred shares would convert to 8,083,542 shares of the Company’s common stock in addition to the 20,020,239 outstanding shares at August 31, 2022. The Series B Convertible Preferred shares would convert to 2,694,514 shares of the Company’s common stock in addition to the 188,616 outstanding shares at August 31, 2021. The Company calculates diluted earnings per share by dividing the Company’s net income available to common shareholders less preferred dividends by the diluted weighted average number of shares outstanding during the period. The conversion of the Company’s Series B Convertible Preferred shares are excluded from the computation of diluted earnings per share as they are anti-dilutive due to the Company’s operating losses for the years ended August 31, 2022 and 2021. Derivative Liabilities The Company generally does not use derivative financial instruments to hedge exposures to cash flow or market risks. However, certain other financial instruments, such as warrants and embedded conversion features on convertible debt, are classified as derivative liabilities due to protection provisions within the agreements. Convertible notes payable are initially recorded at fair value using the Monte Carlo model and subsequently adjusted to fair value at the close of each reporting period. The preferred stock warrants are initially recorded at fair value using the Black Scholes model and subsequently adjusted to fair value at the close of each reporting period. The Company accounts for derivative instruments and debt instruments in accordance with the interpretive guidance of ASC 815, ASU 2017-11, and associated pronouncements related to the classification and measurement of warrants and instruments with conversion features. Income Taxes Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Use of net operating loss carry forwards for income tax purposes may be limited by Internal Revenue Code section 382 if a change of ownership occurs. Stock-Based Compensation The Company accounts for share-based compensation in accordance with the fair value recognition provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 718. The Company issues restricted stock to employees and consultants for their services. Cost for these transactions is measured at the fair value of the equity instruments issued at the date of grant. These shares are considered fully vested and the fair market value is recognized as expense in the period granted. The Company recognized consulting expenses and a corresponding increase to additional paid-in-capital related to stock issued for services. For agreements requiring future services, the consulting expense is to be recognized ratably over the requisite service period. There was no stock-based compensation during years ended August 31, 2022 and 2021. Related Parties The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the related parties include (a) affiliates of the Company; (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. Recently Issued Accounting Standards In August 2020, the FASB issued ASU 2020-06 , Derivatives and Hedging Derivatives and Hedging—Contracts in Entity’s Own Equity As of August 31, 2022, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements. Other Receivable During the year ended August 31, 2022, the Company discovered duplicate withdrawals from its payroll processing company and has recorded a receivable on its condensed consolidated balance sheet at August 31, 2022. There were $56,421 and $0 outstanding other receivable as of August 31, 2022 and August 31, 2021, respectively. Trademark Trademark costs are capitalized as incurred to the extent the Company expects the costs incurred to result in a trademark being awarded. The trademarks are deemed to have an indefinite life and are reviewed for impairment loss considerations annually. As of August 31, 2022 and 2021, the Company had trademarks totaling $1,680. Leases Operating lease right of use (“ROU”) assets represent the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in general and administrative expenses in the consolidated statements of operations. |
ASSET ACQUISITION
ASSET ACQUISITION | 12 Months Ended |
Aug. 31, 2022 | |
ASSET ACQUISITION | |
NOTE 3 - ASSET ACQUISITION | NOTE 3 – ASSET ACQUISITION On October 27, 2021, the Company entered into an asset acquisition agreement with ST Biosciences, Ltd., a company organized under the laws of England and Wales (“STB”), of certain Transferred Assets, consisting substantially of their intellectual property relating to Mioxal®, a nutraceutical complex composed of essential amino acids, natural coenzymes and minerals. The Company acquired certain intellectual property and patent rights, and no tangible assets, assumed certain liabilities related to the acquisition of Mioxal by STB, as discussed below, and some outstanding employee payments. The acquisition was completed pursuant to the terms of the Amended and Restated Asset Purchase Agreement dated November 9, 2021. As consideration for the acquisition, the Company paid $350,000 in cash to Ingenius, paid cash of $500,000 to STB and issued 19,831,623 shares of Common Stock to STB valued at $40,654,827 or $2.05 per share based on the closing market price on November 5, 2021, which at the closing of the acquisition represented approximately 70% of the Company’s outstanding shares of Common Stock on a fully diluted basis, for an aggregate purchase price of $41,504,827, resulting in a change in control of the Company. The shares were issued in December 2021. At acquisition the assets and liabilities assumed were recorded at the fair values as follows: Mioxal® $ 81,249,827 Other intangible assets 178,000 Less liabilities assumed: Mioxal® liability assumed (39,500,000 ) Other liabilities assumed (423,000 ) Net value acquired in asset acquisition $ 41,504,827 During the year ended August 31, 2022, additional intangibles of $28,773 were added related to the asset acquisition for payments made subsequent to the acquisition date. The Mioxal® intellectual property, including the patent rights, was acquired by STB from Ingenius Biotech S.L, a Spanish corporation (“Ingenius”) on September 10, 2021. The Ingenius milestone and stock payments set forth in the Purchase Agreement between Ingenius and STB, were assumed by the Company in aggregate of $39,500,000 and are recorded in current and long-term liabilities in the accompanying consolidated balance sheets. The first installment of $1,500,000 was due on January 15, 2022, the second installment of $1,500,000 on April 15, 2022 and a $3,500,000 payment was due within thirty business days following the occurrence of the milestone event. The milestone, a signed sales agreement with a third party to distribute Mioxal throughout Europe, was not reached and therefore the requirement for the milestone payment was forfeited and will never be owed. In addition, $15,000,000 will be paid through the issuance of the Company’s common stock in three tranches beginning twelve months from execution of agreement with STB on September 10, 2021, as follows: • On September 10, 2022 - $4,000,000, not issued as of the date of this filing • On September 10, 2023 - $5,000,000 • On September 10, 2024 - $6,000,000 • Total stock to be issued - $15,000,000 The remaining balance is to be paid on an earn-out basis whereunder Ingenius will earn an 8% royalty on all sales generated by Mioxal® until the balance is satisfied. On January 13, 2022, the Company entered into Amendment No. 1 to Purchase Agreement with Ingenius Biotech S.L. to modify the terms of the agreement dated September 10, 2021. Under the amended agreement, the first installment of $1,500,000 is now due on June 30, 2022, with an additional extension of the due date to August 30, 2022 (not paid), and the second installment is now due on December 31, 2022. The Mioxal® asset has a 24-year life and will be tested for impairment on an annual basis. During the three and twelve months ended August 31, 2022, amortization of $846,494 and $2,539,483 was expensed. The other intangible assets for $178,000 have a 21-year life. During the three and twelve months ended August 31, 2022, amortization of $2,119 and $6,357 was expensed. During the twelve months ended August 31, 2022, additional intangibles were added related to the asset acquisition in the amount of $38,638. Impairment of Intangible Assets At August 31, 2022, an asset impairment evaluation resulted in the Company recording $35,762,550 in impairment expense in the fourth quarter ended August 31, 2022, and a carrying value of $42,980,076 for the intangible assets. The company had recorded impairment expenses of $17,598 in previous quarters, to total $35,780,148 for the fiscal year. The calculation of the carrying value of the Mioxal net assets was informed by the terms of the subsequent sale of those assets on November 7, 2022, as calculated below: Valuation at the sale of Mioxal: Cash to be received by the Company $ 100,000 FV of 350,000 shares transferred to Buyer ($0.13 per share) (45,500 ) Debt assumed/forgiven by Buyer 39,500,000 NPV of estimated future royalty cash stream 3,425,576 Total estimated value of intangible assets at 8-31-2022 42,980,076 Carrying value of intangible assets at 8-31-2022 $ 78,742,626 Impairment expense at 8-31-2022 on intangible assets $ (35,762,550 ) The assumptions used for estimated future royalty cash stream included 1) 5% royalty on gross margin for a five-year period of estimated sales in the United States, with a two-year introductory delay in taking the product to market, 2) a similar royalty on international sales, with an additional two-year introductory delay and an increased cost of 15% for additive distribution costs, 3) an estimate of approximately 200,000 units sold in year 1 of the projected royalty stream for a total sales estimate of approximately $7,500,000, and 4) sales growth rates of 100% for each of the years 2 through 4, decreasing to 60% in year 5. Growth rate in any subsequent year would be expected to drop off significantly or to 0%, however, those possible future years are not included in the project revenues, costs or gross merging. The projections of foundational sales volumes, revenues and costs were performed by industry experts in January 2022 as part of an independent product evaluation. As with all projections, Management cannot assure that the estimated amounts will be actualized. Subsequent to the end of the period, the Company completed the disposition of all of the Mioxal intellectual property and intangible assets and related debt. See Note 12 Subsequent Events. |
EQUITY INVESTMENT
EQUITY INVESTMENT | 12 Months Ended |
Aug. 31, 2022 | |
EQUITY INVESTMENT | |
NOTE 4 - EQUITY INVESTMENT | NOTE 4 – EQUITY INVESTMENT On April 27, 2020, under the Libertas Participation Agreement, the Company received 45,053 Warrants of QSI Holding Company, a private company, (“QSI” and “QSI Warrants”) to purchase common stock priced at $3.111 per share for common stock par value $0.00001 expiring the 7 th |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Aug. 31, 2022 | |
NOTES PAYABLE | |
NOTE 5 - NOTES PAYABLE | NOTE 5 – NOTES PAYABLE Short-Term Notes Payable On September 14, 2017, the Company issued a $10,000 promissory note to a limited liability company. The loan bears interest at 5% and has a maturity date of September 15, 2018. The unpaid balance including accrued interest was $12,482 and $11,982 at August 31, 2022 and 2021, respectively. The Company is in default with the repayment terms of the note. Interest of $2,482 and $1,982 was accrued for the years ended August 31, 2022 and 2021, respectively. On August 30, 2021, the Company issued a $150,000 promissory note to Calvary. The loan bears interest at 18% and has a maturity date of August 30, 2022. On November 8, 2021, the Company entered into a Warrant Assignment Agreement to assign the QSI Holding Company, Inc. (“QSI”) Warrants issued on April 29, 2020 from QSI to the Company, to Calvary. In consideration of the assignment of the Warrant, Calvary forgave the Company from the principal and interest owing under the Calvary $150,000 promissory note dated August 30, 2021 to fully satisfy the principal and interest owed under the promissory note. The unpaid principal and interest on the date of the assignment of the Warrant to Calvary was $155,088. Investments were reduced by $11,132 and the Company recorded a gain on debt extinguishment of $143,956 in the accompanying consolidated statement of operations. The unpaid balance including accrued interest was $0 and $150,074 at August 31, 2022 and August 31, 2021, respectively. Convertible Notes Payable On April 27, 2020, the Company signed a convertible promissory note with an investor. The $259,615 note was issued with an original issue discount of $57,115 and bears interest at 0% per year. The Company recorded the self-amortizing convertible promissory note using the effective interest rate method to calculate the loan payable at $202,500 and accrued interest at $57,115. The note requires nine equal payments due starting June 15, 2020 for $28,846. In the event the Company fails to make the $28,846 installment payment by the 15 th The conversion features meet the definition of a derivative liability instrument because the conversion rate is variable and therefore does not meet the “fixed-for-fixed” criteria outlined in ASC 815-40-15. As a result, the conversion features of the notes are recorded as a derivative liability at fair value and marked-to-market each period with the changes in fair value each period charged or credited to other income (expense). At August 31, 2022 and 2021, the outstanding principal balances of the convertible notes payable, net of debt discount was $0. The Company recorded interest accretion on the debt discount of $0 and $114,599 for the years ended August 31, 2022 and 2021, respectively, in the accompanying consolidated statements of operations. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Aug. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
NOTE 6 - RELATED PARTY TRANSACTIONS | NOTE 6 – RELATED PARTY TRANSACTIONS As of August 31, 2022, and 2021, the Company owed $0 and $64,600, respectively to its former President and Director. The balance due is recorded as related party payable in the accompanying consolidated balance sheets. The Company has a contract with two consulting and pharmaceutical firms owned by the Chief Science Officer, Salzman Group LLC and Herring Creek Pharmaceuticals, under which research and development activities are performed on behalf of the Company. During the fiscal year 2022, the Company paid $150,000 for a security deposit, $131,500 for research and development fees and assumed $67,000 in a liability from ST Biosciences at the acquisition of the assets described in Note 3 Asset Acquisition. The $67,000 liability was released during the period and was credited to the Mioxal intangible asset. As of August 31, 2022 and 2021, the Company owed $2,665 and $0 to these two firms and owed salary of $4,615 and $0 to Dr. Salzman. As of August 31, 2022, the Company owed Jeffrey Kraws, the Company’s Chief Executive Officer, $17,308 in unpaid salary and $83,516 in unpaid bonuses. There were no such obligations at August 31, 2021, As of August 31, 2022, the Company owed salary of $11,538 to Jason Frankovich, a former director. There was no such obligation at August 31, 2021. |
LEASE LIABILITY
LEASE LIABILITY | 12 Months Ended |
Aug. 31, 2022 | |
LEASE LIABILITY | |
NOTE 7 - LEASE LIABILITY | NOTE 7 – LEASE LIABILITY On January 1, 2022, we adopted ASC Topic 842 – Leases. Under this new guidance, lessees are required to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases. Upon adoption, we recognized operating lease right-of-use (“ROU”) assets and corresponding lease liabilities of $619,825. Lessee accounting We determine if an arrangement is or contains a lease at inception. Our assessment is based on (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period and (3) whether we have the right to direct the use of the asset. Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, the lease term is for the majority of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any one of these criteria. The lease classification affects the expense recognition in the income statement. Operating lease costs are recorded entirely in operating expenses. Finance lease costs are split, where amortization of the ROU asset is recorded in operating expenses and an implied interest component is recorded in interest expense. Under the guidance of ASC 842, operating leases are included in right-of-use assets, current lease liabilities, and noncurrent lease liabilities on our balance sheets. ROU assets and lease liabilities are recognized at commencement date based on the present value of the future minimum lease payments over the lease term. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at transition date in determining the present value of future payments. The ROU asset includes any lease payments made but excludes lease incentives and initial direct costs incurred, if any. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Lease extensions Many leases have options to either extend or terminate the lease. In determining the lease term, we considered all available contract extensions that are reasonably certain of occurring. Operating leases On January 1, 2022, the Company entered into an operating lease for office space. The lease is effective for 3 years from the commencement date with automatic renewal at the expiration date. The lease agreement may be terminated earlier upon ninety days’ prior written notice by either party. The lease requires adjustment upon renewal with an increase to the monthly rent by 10% of the monthly rent due for the month preceding such renewal date or market rate, whichever is the greater amount. The following table summarizes balance sheet data related to leases at August 31, 2022 and August 31, 2021: August 31, 2022 August 31, 2021 Assets Operating lease right of use assets $ 619,825 $ - Less accumulated depreciation (137,739 ) - Total operating lease right of use assets $ 482,086 $ - Liabilities Operating lease liability, current $ 199,203 $ - Operating lease liability, noncurrent 298,423 - Total lease liabilities $ 497,626 $ - Operating lease liability is presented net of lease payments. The Company is required to make monthly payments of $20,000. During the year ended August 31, 2022, the Company paid $122,198 towards the lease liability and $37,802 in interest expense. |
STOCKHOLDERS EQUITY
STOCKHOLDERS EQUITY | 12 Months Ended |
Aug. 31, 2022 | |
STOCKHOLDERS EQUITY | |
NOTE 8 - STOCKHOLDERS EQUITY | NOTE 8 – STOCKHOLDERS’ EQUITY Dividends During the year ended August 31, 2018, the Company issued Series A Convertible Preferred Stock, which accrues dividends at a rate of 5% annually. The Company exchanged the Series A Convertible Preferred for Series B Preferred Stock. As a result of the Exchange agreement, the dividends on the Series A Convertible Preferred Stock was reduced to $0 in the accompanying consolidated balance sheets. The Series B and Series B1 Convertible Preferred Stock accrues dividends at a rate of 10% annually. There was $837,798 and $138,195 of dividends payable at August 31, 2022 and August 31, 2021, respectively. The dividends have not been declared and are accrued in the accompanying condensed consolidated balance sheets as a result of a contractual obligation in the Company’s Series B and Series B1 Preferred Stock offering. Preferred Stock There were no shares of Series A Convertible Preferred Stock issued and outstanding as of August 31, 2022 and 2021, respectively. The Company designated 2,694,514 shares of Series B Convertible Preferred Stock in April 2021. On September 7, 2021, the Company consummated the initial tranche of its $2 million financing contemplated by that certain Series B-1 Purchase Agreement between the Company and an investor pursuant to which the Company agreed to issue and sell the investor up to 2,694,514 shares of its newly designated Series B-1 Convertible Preferred Stock (the “Series B-1 Preferred”) at a Stated Value per share price of $0.742245 (or $2,000,000 in the aggregate). At the initial closing, the Company issued 673,628 shares of Series B-1 Preferred to the investor and received $500,000 in gross proceeds. On October 28, 2021, the Company consummated the second tranche of the Series B-1 Preferred Stock investment, issuing an additional 673,628 shares of its Series B-1 Preferred Stock to the investor at a price per share of $0.742245 or $500,000.00 in the aggregate. On November 9, 2021, the Company consummated the third and final tranche of the Series B-1 Preferred Stock investment, issuing an additional 1,347,256 shares of its Series B-1 Preferred Stock to the investor a price per share of $0.742245 or $1,000,000.00 in the aggregate. The aggregate gross proceeds of $2,000,000 was used by the Company as working capital. On November 24, 2021, the Company entered into, and consummated the financing contemplated by, that certain Series B-1 Purchase Agreement between the Company and an investor, pursuant to which the Company issued and sold to the investor 2,694,514 shares of its Series B-1 Preferred at a per share price of $0.742245, or $2,000,000. The aggregate gross proceeds of $2,000,000 was used by the Company as working capital. There were 8,083,542 and 2,694,514 shares of Series B and Series B-1 Convertible Preferred Stock issued and outstanding as of August 31, 2022 and August 31, 2021, respectively. Common Stock On January 8, 2021, a 308-to-1 reverse stock split was declared effective. In accordance with the terms of all such instruments, the conversion ratio of the Company’s outstanding Series A Convertible Preferred Stock and its various convertible promissory notes, together with the exercise price of its outstanding warrants, were proportionally adjusted to give effect to the reverse stock split. The Company is authorized to issue up to 200,000,000 shares of $0.001 par value common stock. As discussed in Note 3 – Asset Acquisition, There were 20,020,239 and 188,616 common shares issued and outstanding as of August 31, 2022 and 2021, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Aug. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
NOTE 9 - COMMITMENTS AND CONTINGENCIES | NOTE 9 – COMMITMENTS AND CONTINGENCIES On September 30, 2022, a party identified as New You Inc. filed a complaint with the District Court of Clark County, Nevada against Innovation 1 Biotech, Inc, ST Biosciences LTD, Jeffrey Kraws and Jason Frankovich. The complaint alleges that during Mr. Frankovich’s service to New You Inc. as Chairman of the Board of Directors, concurrent with Mr. Frankovich’s and Mr. Kraws’s services as executives of ST Biosciences LTD, Mr. Frankovich converted funds away from New You Inc. to satisfy obligations of ST Biosciences LTD and/or Innovation1 and/or to enrich Frankovich and Kraws. The amount of the claim is a total of $249,020 plus damages in excess of $30,000 and includes a claim for legal fees. The Company’s legal firm has evaluated the claims of the complaint and together with Innovation1 management believes the claims to be without merit. The Company intends to defend against the complaint and believes any potential liability to be $0. |
DERIVATIVE LIABILITY
DERIVATIVE LIABILITY | 12 Months Ended |
Aug. 31, 2022 | |
DERIVATIVE LIABILITY | |
NOTE 10 - DERIVATIVE LIABILITY | NOTE 10 – DERIVATIVE LIABILITY As of August 31, 2022 and August 31, 2021, the Company had no derivative liability in the accompanying condensed consolidated balance sheet, and recorded a gain on change in fair value of the derivative liability of $0 and 1,454,480 for the years ended August 31, 2022 and 2021, respectively, in the accompanying consolidated statement of operations. In addition, the Company amortized $0 and $114,599 to interest accretion during the years ended August 31, 2022 and 2021, respectively, in the accompanying consolidated statement of operations for the preferred stock warrants and derivative convertible notes payable. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Aug. 31, 2022 | |
INCOME TAXES | |
NOTE 11 - INCOME TAXES | NOTE 11 – INCOME TAXES The Company’s policy is to provide for deferred income taxes based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates that will be in effect when the differences are expected to reverse. The U.S. Tax Cuts and Jobs Act (TCJA) legislation reduces the U.S. federal corporate income tax rate from 35.0% to 21.0% and is effective June 22, 2018 for the Company. We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. When it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carryforwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carryforward period. The Company is not aware of any uncertain tax position that, if challenged, would have a material effect on the financial statements for the year ended August 31, 2022 or during the prior three years applicable under FASB ASC 740. We did not recognize any adjustment to the liability for uncertain tax position and therefore did not record any adjustment to the beginning balance of accumulated deficit on the consolidated balance sheet. All tax returns for the Company after its fiscal 2019 year remain open for examination. The differences between the provision (benefit) for federal income taxes and federal income taxes computed using the U.S. statutory tax rate of 21% and state tax rate of 6.5% were as follows: August 31, 2022 August 31, 2021 Federal income tax expense (benefit) based on statutory rate $ (8,545,000 ) 21.0 % $ (192,000 ) 21.0 % State income tax expense (benefit), based on statutory rate (2,665,000 ) 6.5 % - - % Revision of NOL estimates and state effective tax rates (182,000 ) 0.5 % - - % Increase in valuation allowance 11,392,000 (28.0 )% 192,000 (21.0 )% Total taxes on income (loss) $ - - % $ - - % The net deferred tax assets consist of the following: August 31, 2022 August 31, 2021 Deferred tax assets arising from: Net operating loss carryforwards $ 2,163,000 $ 616,000 Impairment expenses 9,845,000 0 Less: valuation allowance (12,008,000 ) (616,000 ) Net deferred tax asset $ - $ - The change in the valuation allowance for the year ended August 31, 2022 was an increase of $11,392,000. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Aug. 31, 2022 | |
SUBSEQUENT EVENTS | |
NOTE 12 - SUBSEQUENT EVENTS | NOTE 12 – SUBSEQUENT EVENTS The Company evaluates events that have occurred after the balance sheet date of August 31, 2022, through the date which the consolidated financial statements were issued. Departure of Directors or Certain Officers; Election of Directors On September 9, 2022, the Board of Directors of Innovation1 Biotech Inc. appointed Frederick E. Pierce, II as a member of the Board. On December 6, 2022, Mr. Pierce was appointed Chairman of the Board, President Interim Acting Chief Executive Officer. On December 6, 2022, Jeffrey Kraws resigned as the Company’s Chief Executive Officer. He remains a member of the Board. On October 19, 2022, Dr. Andrew Salzman resigned from the Board. On November 10, 2022, Dr. Salzman resigned as Chief Science Officer of the Company. On December 5, 2022, the Board appointed Charles W. Allen and Dr. Shahin Gharakhanian as members of the Board. On December 6, 2022, Mr. Allen was appointed Treasurer and Secretary, replacing Jamie Lynn Coulter as Secretary. Completion of Acquisition or Disposition of Assets On November 7, 2022, the Company completed the disposition of all of the assets, including intellectual property assets, relating to Mioxal® to Ingenius Biotech S.L., a corporation organized under the laws of Spain (“Ingenius”). As part of the disposition, certain shareholders of the Company transferred an aggregate of 350,000 shares of the Company’s currently outstanding common stock, to Ingenius and Ingenius agreed to pay the Company (i) $100,000 upon the first to occur of Ingenius’ first sale or commercialization of the Mioxal product or Ingenius’ sale, license, transfer or other disposition of the Mioxal product to a third party, and (ii) a 5% royalty on worldwide net sales of the Mioxal product by Ingenius or a third party commencing on the date of the first sale of Mioxal products and ending on the 18-month anniversary of the last to expire of any patent covering the Mioxal products. Additionally, Ingenius agreed to release the Company from all of its liabilities and obligations relating to the Mioxal products and indemnify the Company from all claims relating to the Mioxal product following the date of the disposition. Amendments to Articles of Incorporation or Bylaws On November 18, 2022, the Board of Directors of the Company (“ Board Entry into a Material Definitive Agreement Subsequent to the year ended August 31, 2022, the Company has entered into a private placement to receive net cash proceeds up to $300,000, net of original issue discount, from secured convertible promissory notes with attached $0.08 warrants to purchase up to 4,411,764 shares of common stock. Each note is discounted 15% with a maturity date of 18 months from original issuance. The notes bear interest of 8% per annum to be paid monthly. Each note is convertible into common shares by dividing the outstanding principal on the note by the conversion price of $0.08. The warrants are exercisable for a period of seven years at an exercise price of $0.08 per share. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Aug. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation | This summary of accounting policies for Innovation1 is presented to assist in understanding the Company’s financial statements. The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting) and have been consistently applied in the preparation of the financial statements. |
Reclassifications | Certain prior year amounts may have been reclassified for comparative purposes to conform to the current-year financial statement presentation. These reclassifications had no effect on previously reported results. |
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results could differ from those estimates. Estimates are used when accounting for fair value calculations, including those related to embedded conversion features of outstanding convertible notes payable. |
Cash and cash equivalents | The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. The Company did not have any cash equivalents as of August 31, 2022 and August 31, 2021. |
Revenue recognition | Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery. |
Fair Value of Financial Instruments | Fair value of certain of the Company’s financial instruments including cash, prepaid expenses, accounts payable, accrued expenses, notes payable, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value investments. Fair value, as defined in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk. Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values. Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of income. The Company did not have any Level 1, Level 2 or Level 3 assets and liabilities at August 31, 2022 and August 31, 2021. |
Principals of Consolidation | The consolidated financial statements represent the results of Innovation1 Biotech Inc., its prior wholly owned subsidiary, Gridiron Ventures – dissolved in April 2022, and the assets, processes, and results therefrom. All intercompany transactions and balances have been eliminated. All financial information has been prepared in conformity with accounting principles generally accepted in the United States of America. |
Inventories | Inventories consist of raw materials and T-free distillate and are stated at the lower of cost or net realizable value using the first‑in, first‑out method. The Company periodically assesses the recoverability of its inventory and reduces the carrying value of the inventory when items are determined to be obsolete, defective or in excess of forecasted sales requirements. Inventory write‑downs for excess, defective and obsolete inventory are recorded as impairment expense in the accompanying statement of operations. The Company wrote-off $17,000 and $19,450 of obsolete inventory or inventory below market value for the for the years ended August 31, 2022 and 2021, respectively. A summary of the Company’s inventory as of August 31, 2022 and 2021 are as follows: Type August 31, 2022 August 31, 2021 Raw Materials $ - $ - T-free Distillate - 17,000 Total Inventory $ - $ 17,000 |
Property and Equipment | Property and equipment are carried at cost. Expenditures for maintenance and repairs are expensed in the period incurred. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in income for the period. Depreciation is computed for financial statement purposes on a straight-line basis over estimated useful lives of the related assets and the modified accelerated cost recovery system for federal income tax purposes. The estimated useful lives of depreciable computers and other equipment are three years. With the asset acquisition as discussed in Note 3 – Asset Acquisition |
Intangible Assets | The Company accounts for intangible assets as prescribed in ASC 350 Intangibles – Goodwill and Other, Including its evaluation for impairment on a periodic basis. The acquisition of the Mioxal intangible assets from ST Biosciences as described in Note 3 Acquisition were recorded at the acquisition cost, with the assumed debt recorded at its face value. The Company performed an evaluation of impairment at August 31, 2022, and recorded an impairment expense commensurate with the net present value of expected future cash flows, as informed by the sale of the Mioxal intangible assets and debt at November 7, 2022. |
Basic Income (Loss) Per Share | Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. The Series B and Series B1 Convertible Preferred shares would convert to 8,083,542 shares of the Company’s common stock in addition to the 20,020,239 outstanding shares at August 31, 2022. The Series B Convertible Preferred shares would convert to 2,694,514 shares of the Company’s common stock in addition to the 188,616 outstanding shares at August 31, 2021. The Company calculates diluted earnings per share by dividing the Company’s net income available to common shareholders less preferred dividends by the diluted weighted average number of shares outstanding during the period. The conversion of the Company’s Series B Convertible Preferred shares are excluded from the computation of diluted earnings per share as they are anti-dilutive due to the Company’s operating losses for the years ended August 31, 2022 and 2021. |
Derivative Liabilities | The Company generally does not use derivative financial instruments to hedge exposures to cash flow or market risks. However, certain other financial instruments, such as warrants and embedded conversion features on convertible debt, are classified as derivative liabilities due to protection provisions within the agreements. Convertible notes payable are initially recorded at fair value using the Monte Carlo model and subsequently adjusted to fair value at the close of each reporting period. The preferred stock warrants are initially recorded at fair value using the Black Scholes model and subsequently adjusted to fair value at the close of each reporting period. The Company accounts for derivative instruments and debt instruments in accordance with the interpretive guidance of ASC 815, ASU 2017-11, and associated pronouncements related to the classification and measurement of warrants and instruments with conversion features. |
Income Taxes | Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Use of net operating loss carry forwards for income tax purposes may be limited by Internal Revenue Code section 382 if a change of ownership occurs. |
Stock-Based Compensation | The Company accounts for share-based compensation in accordance with the fair value recognition provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 718. The Company issues restricted stock to employees and consultants for their services. Cost for these transactions is measured at the fair value of the equity instruments issued at the date of grant. These shares are considered fully vested and the fair market value is recognized as expense in the period granted. The Company recognized consulting expenses and a corresponding increase to additional paid-in-capital related to stock issued for services. For agreements requiring future services, the consulting expense is to be recognized ratably over the requisite service period. There was no stock-based compensation during years ended August 31, 2022 and 2021. |
Related Parties | The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions. Pursuant to Section 850-10-20 the related parties include (a) affiliates of the Company; (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. |
Recently Issued Accounting Standards | In August 2020, the FASB issued ASU 2020-06 , Derivatives and Hedging Derivatives and Hedging—Contracts in Entity’s Own Equity As of August 31, 2022, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements. |
Other receivable | During the year ended August 31, 2022, the Company discovered duplicate withdrawals from its payroll processing company and has recorded a receivable on its condensed consolidated balance sheet at August 31, 2022. There were $56,421 and $0 outstanding other receivable as of August 31, 2022 and August 31, 2021, respectively. |
Trademark | Trademark costs are capitalized as incurred to the extent the Company expects the costs incurred to result in a trademark being awarded. The trademarks are deemed to have an indefinite life and are reviewed for impairment loss considerations annually. As of August 31, 2022 and 2021, the Company had trademarks totaling $1,680. |
Leases | Operating lease right of use (“ROU”) assets represent the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in general and administrative expenses in the consolidated statements of operations. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Aug. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Sechdule of Inventory | Type August 31, 2022 August 31, 2021 Raw Materials $ - $ - T-free Distillate - 17,000 Total Inventory $ - $ 17,000 |
ASSET ACQUISITION (Tables)
ASSET ACQUISITION (Tables) | 12 Months Ended |
Aug. 31, 2022 | |
ASSET ACQUISITION | |
Sechdule of Fair Value of assets and liabilities | Mioxal® $ 81,249,827 Other intangible assets 178,000 Less liabilities assumed: Mioxal® liability assumed (39,500,000 ) Other liabilities assumed (423,000 ) Net value acquired in asset acquisition $ 41,504,827 |
Impairment of Intangible Assets | Valuation at the sale of Mioxal: Cash to be received by the Company $ 100,000 FV of 350,000 shares transferred to Buyer ($0.13 per share) (45,500 ) Debt assumed/forgiven by Buyer 39,500,000 NPV of estimated future royalty cash stream 3,425,576 Total estimated value of intangible assets at 8-31-2022 42,980,076 Carrying value of intangible assets at 8-31-2022 $ 78,742,626 Impairment expense at 8-31-2022 on intangible assets $ (35,762,550 ) |
LEASE LIABILITY (Tables)
LEASE LIABILITY (Tables) | 12 Months Ended |
Aug. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Summary of balance sheet data related to leases | August 31, 2022 August 31, 2021 Assets Operating lease right of use assets $ 619,825 $ - Less accumulated depreciation (137,739 ) - Total operating lease right of use assets $ 482,086 $ - Liabilities Operating lease liability, current $ 199,203 $ - Operating lease liability, noncurrent 298,423 - Total lease liabilities $ 497,626 $ - |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Aug. 31, 2022 | |
INCOME TAXES | |
provision (benefit) for federal income taxes and federal income taxes | August 31, 2022 August 31, 2021 Federal income tax expense (benefit) based on statutory rate $ (8,545,000 ) 21.0 % $ (192,000 ) 21.0 % State income tax expense (benefit), based on statutory rate (2,665,000 ) 6.5 % - - % Revision of NOL estimates and state effective tax rates (182,000 ) 0.5 % - - % Increase in valuation allowance 11,392,000 (28.0 )% 192,000 (21.0 )% Total taxes on income (loss) $ - - % $ - - % |
Schedule of deferred tax assets | August 31, 2022 August 31, 2021 Deferred tax assets arising from: Net operating loss carryforwards $ 2,163,000 $ 616,000 Impairment expenses 9,845,000 0 Less: valuation allowance (12,008,000 ) (616,000 ) Net deferred tax asset $ - $ - |
ORGANIZATION AND DESCRIPTION _2
ORGANIZATION AND DESCRIPTION OF BUSINESS (Details Narrative) | 12 Months Ended |
Aug. 31, 2022 USD ($) | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | |
Net operating loss | $ 40,877,813 |
Working capital deficit | 29,525,460 |
Accumulated Deficit | $ (44,551,043) |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | Aug. 31, 2022 | Aug. 31, 2021 |
Inventory | $ 0 | $ 17,000 |
T-Free Distillate [Member] | ||
Inventory | 0 | 17,000 |
Raw Materials [Member] | ||
Inventory | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | ||
Aug. 31, 2022 | Aug. 31, 2021 | Sep. 10, 2022 | |
Obsolete Inventory, written off | $ 17,000 | $ 19,450 | |
Depreciation | 523 | $ 1,414 | |
Common stock shares outstanding | 188,616 | ||
Outstanding accounts receivable | 56,421 | $ 0 | |
Stock based compensation | 0 | ||
Trademarks | $ 1,680 | $ 1,680 | |
Amount received | $ 15,000,000 | ||
April 15, 2022 [Member] | Ingenius Biotech [Member] | |||
Amount received | $ 15,000,000 | ||
Preferred stock Series B [Member] | |||
Common stock shares outstanding | 188,616 | ||
Common stock issued upon conversion of preferred stock | 2,694,514 | ||
Preferred stock Series B One [Member] | |||
Common stock shares outstanding | 20,020,239 | ||
Common stock issued upon conversion of preferred stock | 8,083,542 |
ASSET ACQUISITION (Details)
ASSET ACQUISITION (Details) | Oct. 13, 2022 USD ($) |
ASSET ACQUISITION | |
Mioxal assets | $ 81,249,827 |
Other intangible assets | 178,000 |
Less liabilities assumed | |
Mioxal liability assumed | (39,500,000) |
Other liabilities assumed | (423,000) |
Net value acquired in asset acquisition | $ 41,504,827 |
ASSET ACQUISITION (Details 1)
ASSET ACQUISITION (Details 1) | 12 Months Ended |
Aug. 31, 2022 USD ($) | |
ASSET ACQUISITION | |
Cash to be received by the Company | $ 100,000 |
FV of 350,000 shares transferred to Buyer ($0.13 per share) | (45,500) |
Debt assumed/forgiven by Buyer | 39,500,000 |
NPV of estimated future royalty cash stream | 3,425,576 |
Total estimated value of intangible assets at 8-31-2022 | 42,980,076 |
Carrying value of intangible assets at 8-31-2022 | 78,742,626 |
Impairment expense at 8-31-2022 on intangible assets | $ (35,762,550) |
ASSET ACQUISITION (Details Narr
ASSET ACQUISITION (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Sep. 10, 2022 | Aug. 31, 2022 | Nov. 30, 2021 | Aug. 31, 2022 | Aug. 31, 2021 | |
Impairment expenses | $ 17,598 | $ 35,780,148 | |||
Interest on royalty, percentage | 8% | ||||
Amount received | $ 15,000,000 | ||||
Intangible assets | $ 28,773 | ||||
Common Stock issued for asset purchase, amount | $ 40,654,827 | $ 40,654,827 | |||
Common stock, shares par value | $ 0.001 | $ 0.001 | $ 0.001 | ||
Common stock shares issued | 20,020,239 | 20,020,239 | 188,616 | ||
Series B-1, Convertible Preferred Stock | Tranche One [Member] | |||||
Common Stock issued for asset purchase, amount | $ 500,000 | ||||
Series B-1, Convertible Preferred Stock | Tranche Two [Member] | |||||
Common Stock issued for asset purchase, amount | 500,000 | ||||
Common Stock issued for asset purchase, amount | 15,000,000 | ||||
Series B-1, Preferred Stock | Tranche Three [Member] | |||||
Common Stock issued for asset purchase, amount | 1,000,000 | ||||
Ingenius Biotech [Member] | |||||
Current and long-term liabilities | 39,500,000 | ||||
Ingenius Biotech [Member] | April 15, 2022 [Member] | |||||
Amount received | 15,000,000 | ||||
Asset acquisition second installment | 1,500,000 | ||||
Ingenius Biotech [Member] | January 15, 2022 [Member] | |||||
Asset acquisition first installment | 1,500,000 | ||||
Asset acquisition thereafter | 3,500,000 | ||||
Ramaining amount | 1,500,000 | ||||
S T Bio Sciences Ltd | |||||
Common Stock issued for asset purchase, amount | 42,980,076 | ||||
Amortization costs | $ 38,638 | 2,539,483 | |||
Cash consideration paid | $ 350,000 | ||||
Common stock, shares par value | $ 2.05 | ||||
Imper?iment expenses | 35,762,550 | ||||
Common stock shares issued | 19,831,623 | ||||
S T Bio Sciences Ltd | Tranche One [Member] | |||||
Amount received | $ 4,000,000 | ||||
S T Bio Sciences Ltd | Tranche Two [Member] | |||||
Amount received | 5,000,000 | ||||
S T Bio Sciences Ltd | Tranche Three [Member] | September 10, 2024 [Member] | |||||
Amount received | $ 6,000,000 | ||||
Mioxal [Member] | |||||
Amortization costs | 846,494 | $ 41,504,827 | |||
Useful life asset | 24 years | ||||
Mioxal [Member] | Other Intangible Assets[Member] | |||||
Amortization costs | $ 2,119 | $ 6,357 | |||
Useful life asset | 21 years | ||||
Intangible assets | $ 178,000 |
EQUITY INVESTMENT (Details Narr
EQUITY INVESTMENT (Details Narrative) - QSI Holding Company [Member] - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Apr. 27, 2020 | Aug. 31, 2022 | Aug. 31, 2021 | Aug. 31, 2022 | Aug. 31, 2021 | Aug. 30, 2021 | |
Warrant excercise price | $ 3.111 | |||||
Common stock, par value | $ 0.00001 | |||||
Warrants outstanding | $ 58,443 | |||||
Per share value common share | $ 3.4520 | |||||
Warrant estmated usful life | 7 years | |||||
Proceed from warrants | $ 45,053 | |||||
Common stock, price per share | $ 3.111 | |||||
Warrant risk free interest rate | 56% | |||||
Warrant volatility rate | 32% | |||||
Discount on warrants | $ 58,443 | |||||
Life of Warrants | 7 years | |||||
Promissory note | $ 50,000 | |||||
Equity investment | $ 0 | $ 11,132 | $ 0 | $ 11,132 | ||
Other income | $ 0 | $ 2,088 | $ 0 | $ 8,349 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Sep. 14, 2017 | Aug. 31, 2021 | Apr. 27, 2020 | Aug. 31, 2022 | Aug. 31, 2021 | Nov. 08, 2021 | Aug. 30, 2021 | |
Gain on debt extinguishment | $ (143,956) | $ 0 | |||||
Short-Term Debts [Member] | |||||||
Promisory notes payable | $ 10,000 | ||||||
Notes payable, interest rate | 5% | ||||||
Debt instrument, maturity date | Sep. 15, 2018 | ||||||
Accrued interest | $ 11,982 | 12,482 | 11,982 | ||||
Interest expensed | 2,482 | 1,982 | |||||
Short-Term Notes Payable 1 [Member] | |||||||
Promisory notes payable | $ 150,000 | ||||||
Notes payable, interest rate | 18% | ||||||
Debt instrument, maturity date | Aug. 30, 2022 | ||||||
Unpaid accrued interest | $ 150,074 | 0 | 150,074 | $ 155,088 | |||
Reduced investment | 11,132 | ||||||
Gain on debt extinguishment | 143,956 | ||||||
ConvertibleNotesPayable [Member] | |||||||
Accrued interest | 57,115 | ||||||
Note issued | $ 259,615 | ||||||
Original issue discount | $ 57,115 | ||||||
Bears Interest | 0% | ||||||
Loan Payable | $ 202,500 | ||||||
Installment Payment due date | 5 years | ||||||
Description of convertible promissory note with an investor | equires nine equal payments due starting June 15, 2020 for $28,846 | ||||||
Unpaid principal & interest balance | $ 0 | 0 | |||||
Description of default on convertible promissory note | the defaulted amount owed shall be 130% of the total outstanding balance owed by the Company. The default interest rate for missing an installment payment shall be 18% and the conversion into common stock shall be at a price of $0.02 per common stock. The note principal and interest are convertible into shares of common stock at the lower of $0.02 per share or a 35% discount to the lowest traded price of the Company’s common stock during the 10 prior trading days including the day the notice of conversion is received by the Company. The note matured on February 21, 2021. The Company made the first payment on June 15, 2020 for $28,846 and a partial payment of $10,000 on July 15, 2020 | ||||||
Debt discount | $ 0 | $ 114,599 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
Owed salary | $ 4,615 | $ 0 |
Security deposit | 150,000 | |
Liability amount from biosciences | 67,000 | |
Unpaid salary | 17,308 | |
Unpaid bonuses | 83,516 | |
Research and development fee | 201,165 | 0 |
Due to related party | 0 | 64,600 |
President And Director [Member] | ||
Due to related party | 0 | 64,600 |
Former Director [Member] | ||
Owed salary | 11,538 | |
ST Bioscience [Member] | ||
Research and development fee | 131,500 | |
Mioxal [Member] | ||
Liability amount released | 67,000 | |
Acquire amount | $ 2,665 | $ 0 |
LEASE LIABILITY (Details)
LEASE LIABILITY (Details) - USD ($) | Aug. 31, 2022 | Aug. 31, 2021 |
LEASE LIABILITY | ||
Operating lease right of use assets | $ 619,825 | $ 0 |
Less accumulated depreciation | (137,739) | 0 |
Total operating lease right of use assets | 482,086 | 0 |
Operating lease liability, current | 199,203 | 0 |
Operating lease liability, noncurrent | 298,423 | 0 |
Total lease liabilities | $ 497,626 | $ 0 |
LEASE LIABILITY (Details Narrat
LEASE LIABILITY (Details Narrative) - USD ($) | 12 Months Ended | ||
Aug. 31, 2022 | Aug. 31, 2021 | Jan. 01, 2022 | |
LEASE LIABILITY | |||
Monthly rent, Description | The lease requires adjustment upon renewal with an increase to the monthly rent by 10% of the monthly rent due for the month preceding such renewal date or market rate, whichever is the greater amount | ||
Monthly payment | $ 20,000 | ||
Amount paid | 122,198 | ||
Interest paid | $ 37,802 | $ 0 | |
Lease liability | $ 619,825 |
STOCKHOLDERS EQUITY (Details Na
STOCKHOLDERS EQUITY (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Nov. 30, 2021 | Aug. 31, 2022 | Aug. 31, 2021 | Nov. 24, 2021 | Oct. 28, 2021 | Sep. 07, 2021 | |
Common stock, shares par value | $ 0.001 | $ 0.001 | ||||
Common stock, shares authorized | 200,000,000 | 2,000,000 | 2,000,000 | |||
Common stock, shares issued | 20,020,239 | 188,616 | ||||
Common stock, shares outstanding | 20,020,239 | 188,616 | ||||
Dividends payable | $ 837,798 | $ 138,195 | ||||
Dividend interest rate | 10% | |||||
Aggregate gross proceeds | 2,000,000 | |||||
Common Stock issued for asset purchase, amount | $ 40,654,827 | $ 40,654,827 | ||||
Gross margin | $ 0 | $ 1,659 | ||||
STB [Member] | ||||||
Common stock, price per share | $ 2.05 | |||||
Shares issued | 19,831,623 | |||||
Series B-1, Convertible Preferred Stock | L1 Capital [Member] | ||||||
Shares issued | 2,694,514 | |||||
Series B-1, Convertible Preferred Stock | Tranche One [Member] | ||||||
Common Stock issued for asset purchase, amount | $ 500,000 | |||||
Common stock, price per share | $ 0.742245 | $ 0.742245 | ||||
Shares issued | 673,628 | |||||
Series B-1, Convertible Preferred Stock | Tranche Two [Member] | ||||||
Common Stock issued for asset purchase, amount | 500,000 | |||||
Common stock, price per share | $ 0.742245 | |||||
Shares issued | 673,628 | |||||
Series B-1, Convertible Preferred Stock | Initial Tranche [Member] | ||||||
Common Stock issued for asset purchase, amount | $ 2,000,000 | |||||
Common stock, price per share | $ 0.742245 | |||||
Shares issued | 2,694,514 | 2,694,514 | ||||
Series B-1, Preferred Stock | Tranche Three [Member] | ||||||
Common Stock issued for asset purchase, amount | $ 1,000,000 | |||||
Gross margin | $ 2,000,000 | |||||
Common stock, price per share | $ 0.742245 | |||||
Shares issued | 1,347,256 | |||||
Convertible Preferred Stock A [Member] | ||||||
Preferred stock, shares issued | 0 | 0 | ||||
Preferred stock, shares outstanding | 0 | 0 | ||||
Convertible Preferred Stock B [Member] | ||||||
Preferred stock, shares issued | 8,083,542 | 2,694,514 | ||||
Preferred stock, shares outstanding | 8,083,542 | 2,694,514 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 12 Months Ended |
Aug. 31, 2022 USD ($) | |
COMMITMENTS AND CONTINGENCIES | |
Claim for legal fees | $ 30,000 |
Claim amount | 249,020 |
Potential liability | $ 0 |
DERIVATIVE LIABILITY (Details N
DERIVATIVE LIABILITY (Details Narrative) - USD ($) | 12 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
DERIVATIVE LIABILITY (Details Narrative) | ||
Gain loss on fair value | $ 0 | $ 1,454,480 |
Interest accretion | $ 0 | $ 114,599 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
INCOME TAXES | ||
Income tax provision at the federal statutory rate | 21% | 21% |
Income tax provision at the federal statutory amount | $ (8,545,000) | $ (192,000) |
State income tax expense (benefit), based on statutory rate | 6% | 0% |
State income tax expense (benefit), based on statutory rate | $ (2,665,000) | $ 0 |
Revision of NOL estimates and state effective tax rate | 0.50% | 0% |
Revision of NOL estimates and state effective tax amount | $ (182,000) | $ 0 |
Increase in valuation allowance | $ 11,392,000 | $ 192,000 |
Increase in valuation allowance Rate | (28.00%) | (21.00%) |
Total taxes on income (loss) | $ 0 | $ 0 |
Total taxes on income (loss) rate | 0% | 0% |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | |
Aug. 31, 2022 | Aug. 31, 2021 | |
INCOME TAXES | ||
Impairment expenses | $ 9,845,000 | $ 0 |
Net operating loss carryforwards | 2,163,000 | 616,000 |
Less: valuation allowance | (12,008,000) | (616,000) |
Net deferred tax asset | $ 0 | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 12 Months Ended |
Aug. 31, 2022 USD ($) | |
INCOME TAXES | |
Change in valuation allowance | $ 11,392,000 |
Income tax rate reduction description | The U.S. Tax Cuts and Jobs Act (TCJA) legislation reduces the U.S. federal corporate income tax rate from 35.0% to 21.0% and is effective June 22, 2018 for the Company |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 12 Months Ended | ||
Nov. 07, 2022 | Aug. 31, 2022 | Aug. 31, 2021 | |
Common stock shares outstanding | 20,020,239 | 188,616 | |
Subsequent Event [Member] | Ingenius [Member] | |||
Payment to the party | $ 100,000 | ||
Percentage of royalty | 5% | ||
Common stock shares outstanding | 350,000 | ||
Thirty First August Two Thousand Twenty Two [Member] | |||
Net cash proceeds | $ 300,000 | ||
Purchase of warrants | $ 0.08 | ||
Common stock shares | 4,411,764 | ||
Percentage of Discount | 15% | ||
Intrest rate | 8% | ||
Conversion price | $ 0.08 | ||
Exercise price | $ 0.08 |