10-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K /A

(Amendment No. 1)

(Mark One)

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended August 31, 2019
¨	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ________ to ________
	Commission file number 333-234372

Artelo Biosciences, Inc.

(Exact name of registrant as specified in its charter)

Nevada	33-1220924
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
888 Prospect Street, Suite 210, La Jolla CA	92037
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (760) 943-1689

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	ARTL	Nasdaq
Warrants	ARTLW	Nasdaq

Securities registered pursuant to Section 12(g) of the Act:

N/A

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the last 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x	Smaller reporting company	x
		Emerging Growth Company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The aggregate market value of Common Stock held by non-affiliates of the Registrant on February 28, 2019, was $12,811,969 based on a $9.60 closing price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

The Registrant had 3,420,026 shares of common stock, par value $0.001 per share, issued and outstanding as of December 11, 2019.

EXPLANATORY NOTE

Artelo Biosciences, Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-K/A (this “Amendment”) to its Annual Report on Form 10-K for the period ended August 31, 2019, which was originally filed on November 25, 2019 (the “Original Filing”). The purpose of this Amendment is to amend and restate Part III. The Company does not anticipate filing its definitive proxy statement within 120 days of its fiscal year ended August 31, 201 9 . Therefore, the information required by Part III of Form 10-K will not be incorporated by reference to our definitive proxy statement for the 20 20 Annual Meeting of Stockholders.

Except as described above, this Amendment does not modify or update the disclosure in, or exhibits to, the Original Filing in any way, and the parts or exhibits of the Original Filing which have not been modified or updated are not included in this Amendment. Furthermore, this Form 10-K/A does not change any previously reported financial results, nor does it reflect events occurring after the filing date of the Original Filing. Information not affected by this Form 10-K/A remains unchanged and reflects the disclosures made at the time the Original Filing was filed. This Amendment continues to speak as of the date of the Original Filing, and the Company has not updated the disclosure contained herein to reflect events that have occurred since the filing of the Original Filing. Accordingly, this Amendment should be read in conjunction with the Company’s other filings made with the Securities and Exchange Commission since the filing of the Original Filing, including amendments to those filings, if any.

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TABLE OF CONTENTS

PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	4
ITEM 11.	EXECUTIVE COMPENSATION	8
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	13
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	14
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	15
SIGNATURES		16

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

All directors of our company hold office until the next annual meeting of the security holders or until their successors have been elected and qualified. The officers of our company are appointed by our board of directors (“Board”) and hold office until their death, resignation or removal from office. Our directors and executive officers, their ages, positions held, and duration as such, are as follows:

Name	Position Held with the Company	Age
Gregory D. Gorgas	President, Chief Executive Officer, Chief Financial Officer, Treasurer, Secretary and Director	56
Connie Matsui(1)(3)	Director, Chairperson of the Board	65
Steven Kelly(1) ( 3 )	Director	54
Douglas Blayney(2)	Director	69
R. Martin Emanuele(2)	Director	65
Georgia Erbez(1)(3) (4)	Director	52
John W. Beck(1) (5)	Director	60

_______________

(1) Member of the audit committee

(2) Members of the corporate governance and nominating committee

(3) Members of the compensation committee

(4) Georgia Erbez resigned from the Board on December 2, 2019.

(5) John W. Beck was appointed to the Board on December 6 , 2019.

Business Experience

The following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee of our company, indicating the person’s principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.

Directors

Gregory D. Gorgas was appointed president, chief executive officer, chief financial officer, treasurer, secretary and director of our Company on April 3, 2017. Prior to joining our Company, Mr. Gorgas was Senior Vice President, Commercial, and Corporate Officer at Mast Therapeutics from July 2011 to January 2017 with commercial leadership accountability and business development responsibilities for the hematology, oncology and cardiovascular development programs. In addition, he performed a key role in helping Mast raise over $50M in new capital. From November 2009 to July 2011, Mr. Gorgas was Managing Director at Theragence, Inc., a privately-held company he co-founded, that applies proprietary computational intelligence to mine and analyze clinical data. From November 2008 to July 2011, Mr. Gorgas also served as an independent consultant, providing commercial and business development consulting services to pharmaceutical, biotechnology and medical device companies. From 1997 to October 2008, Mr. Gorgas held several positions with Biogen Idec Inc., most recently, from March 2006 to October 2008, as Senior Director, Global and U.S. Marketing with responsibility for the strategic vision and operational commercialization of the company’s worldwide cancer business. In this role, he hired and led the team in marketing, operations, project management, and business development in Europe and the US. Before such time, he had increasing responsibilities in marketing, sales, commercial operations, and project team and alliance management. Mr. Gorgas currently serves as director at Theragence and on the advisory board at Klotho Therapeutics. He holds an MBA from the University of Phoenix and a BA in economics from California State University, Northridge.

We believe that Mr. Gorgas’ professional background and experience in the biotechnology industry and assisting companies in financing efforts give him the qualifications and skills necessary to serve as an officer and director of our Company.

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Connie Matsui was elected to our Board on May 2, 2017. Ms. Matsui brings to her role over 16 years of general management experience in the biotechnology industry. Ms. Matsui retired from Biogen Idec in January 2009 as Executive Vice President, Knowledge and Innovation Networks. She served as an Executive Committee member at both Biogen Idec and IDEC Pharmaceuticals, a predecessor of Biogen Idec. Among the major roles she held after joining IDEC in November 1992 were: Senior Vice President, overseeing investor relations, corporate communications, human resources, project management and strategic planning; Collaboration Chair for the late stage development and commercialization of rituximab (tradenames: Rituxan ^® , MabThera ^® ) in partnership with Roche and Genentech; and Project Leader for Zevalin ^® , the first radioimmunotherapy approved by the FDA. Prior to entering the biotechnology industry, Ms. Matsui worked for Wells Fargo Bank in general management, marketing and human resources. Ms. Matsui currently serves as the Chair of the Board at Halozyme Therapeutics and at Sutro Biopharma and has been active on a number of not-for-profit boards. She was National President/Board Chair of the Girl Scouts of the USA from 1999 to 2002. Ms. Matsui earned BA and MBA degrees from Stanford University.

We believe that Ms. Matsui’s professional background experience gives her the qualifications and skills necessary to serve as a director of our Company and chairperson of the Board.

Steven Kelly was elected to our Board on May 2, 2017. Mr. Kelly brings nearly thirty years of experience in Pharma/Biotech at all phases of the business across multiple therapeutic categories. Mr. Kelly is currently CEO at Carisma Therapeutics, a venture backed biotech pioneering the development of CAR macrophages, a disruptive approach to immunotherapy in cancer. From 2012 to 2018, Mr. Kelly was the principal of Kelly BioConsulting, LLC, and served as an independent consultant providing strategic direction and guidance to a variety of life sciences companies. Previously, Mr. Kelly was the founding CEO of Pinteon Therapeutics, an early stage oncology and CNS development company. Prior to this he held a number of leadership positions in the biotechnology industry including: CEO, Theracrine; CCO, BioVex; CEO, Innovive Pharmaceuticals; as well as various commercial and manufacturing roles at Sanofi, IDEC Pharmaceuticals and Amgen. Mr. Kelly holds a BS from University of Oregon and an MBA from Cornell University.

We believe that Mr. Kelly’s professional background experience gives him the qualifications and skills necessary to serve as a director of our Company.

Douglas Blayney was elected to our Board on July 31, 2017. Dr. Blayney is a Professor of Medicine at Stanford University and former Medical Director of Stanford Cancer Center. Dr. Blayney is a past president of the American Society of Clinical Oncology (ASCO) and a founder of the ASCO Quality Symposium. He was previously a Professor of Internal Medicine and Medical Director of the Comprehensive Cancer Center at the University of Michigan, and prior to that practiced and led Wilshire Oncology Medical Group, Inc. a physician owned multidisciplinary oncology practice in southern California. Dr. Blayney served on the Food and Drug Administration’s Oncologic Drugs Advisory Committee and is Founding Editor-in-Chief and Editor-in-Chief Emeritus of ASCO’s Journal of Oncology Practice. He has over 70 scientific publications with expertise on clinical trial development, use of oncology drugs in clinical practice, and information technology use. Dr. Blayney earned a degree in electrical engineering from Stanford, is a graduate of the University of California, San Diego School of Medicine, and received post graduate training at UCSD and at the National Cancer Institute in Bethesda, Maryland.

We believe that Dr. Blayney’s professional background experience gives him the qualifications and skills necessary to serve as a director of our Company.

R. Martin Emanuele was elected to our Board on September 20, 2017. Dr. Emanuele is currently co-founder and Chief Operating Officer of Visgenx. Inc, a private bio-pharmaceutical company. From May 2011 to October 2016, he served as Senior Vice President, Development at Mast Therapeutics Inc., (now Savara, Inc a bio-pharmaceutical company). From April 2010 to April 2011, Dr. Emanuele was Vice President, Pharmaceutical Strategy at DaVita, Inc., and leading provider of dialysis and other healthcare services in the United States. Prior to DaVita, from June 2008 to April 2010, Dr. Emanuele was a co-founder and CEO of SynthRx, Inc. a private bio-pharmaceutical company that was acquired by Mast Therapeutics (Savara, Inc) in April 2011. From November 2006 to May 2008, Dr. Emanuele was Senior Vice President, Business Development at Kemia, Inc., a venture-backed privately-held company focused on discovering and developing small molecule therapeutics. From 2002 to 2006, Dr. Emanuele held various senior-level positions with Avanir Pharmaceuticals, Inc., most recently as Vice President, Corporate Development and Portfolio Management, and from 1988 to 2002, Dr. Emanuele held positions of increasing responsibility at CytRx Corporation, most recently as Vice President, Research and Development and Business Development. He earned a PhD in pharmacology and experimental therapeutics from Loyola University of Chicago, Stritch School of Medicine and a BS in biology from Colorado State University. He also holds an MBA with an emphasis in healthcare and pharmaceutical management from the University of Colorado.

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We believe that Dr. Emanuele’s professional background experience gives him the qualifications and skills necessary to serve as a director of our Company.

Georgia Erbez was elected to our Board on September 20, 2017 and resigned on December 2, 2019. Ms. Erbez is currently Chief Financial Officer of Harpoon Therapeutics, Inc. Previously, she served as Chief Business Officer and CFO of Zosano Pharma Corporation, a public pharmaceutical company, from September 2016 to May 2018. Ms. Erbez has served as Chief Business Officer of Zosano Pharma Corporation, a public pharmaceutical company, since September 2016. She Ms. Erbez served as Chief Financial Officer and Executive Vice President of Asterias Biotherapeutics, Inc., a biopharmaceutical company, from November 2015 to March 2016. From September 2012 to November 2014 she served as Chief Financial Officer, Secretary and Treasurer of Raptor Pharmaceuticals, a pharmaceutical company. Prior to Raptor, Ms. Erbez was a Managing Director, Healthcare Investment Banking at Collins Stewart, a wealth management company, from April 2011 to January 2012. From June 1998 to September 2012, Ms. Erbez was a senior level investment banker at Beal Advisors, Jeffries & Company, Inc. and Cowen and Company. She has also held positions at the investment banks Hambrecht & Quist and Alex, Brown & Sons Inc. Ms. Erbez received a Bachelor of Arts degree, International Relations from the University of California at Davis.

We believe that Ms. Erbez’s professional background experience gives her the qualifications and skills necessary to serve as a director of our Company.

John W. Beck was elected to our Board on December 6 , 2019. Mr. Beck, age 60 , has served as the Senior Vice President and Chief Financial Officer at Ritter Pharmaceuticals, Inc., a publicly traded pharmaceutical company, since May 2018. From 2008 until its acquisition by AstraZeneca in 2012, Mr. Beck, served first as a board member and later as Chief Financial Officer and Senior Vice President of finance & operations of Ardea Biosciences Inc. (“Ardea”). Before joining Ardea, Mr. Beck spent 10 years with Metabasis Thereapeutics Inc., as a Co-Founder and its Chief Financial Officer. Since leaving Ardea in 2012, Mr. Beck has been serving as a board member and advisor to August Therapeutics, Inc., a San Diego California-based company developing non-systemic therapeutics to treat disordered eating and obesity, and Pinnacle Medical Holdings, LLC, a Denver Colorado-based physician-led network of health-care providers, which was acquired by OnPoint Medical Group, LLC in August 2017. Mr. Beck also serves as a financial mentor to UCSD’s TRITON Funds. Mr. Beck holds a Bachelor’s degree in Accounting from the University of Washington, Seattle and a Bachelor’s degree in Theology from a Seattle-area seminary.

We believe that M r . Beck ’s professional background experience gives him the qualifications and skills necessary to serve as a director of our Company.

Executive Officers

Gregory D. Gorgas. Please see biography in “Directors” section above.

Board Meetings

Since August 31, 2018, our Board has met five times on November 30, 2018, March 15, 2019, June 20, 2019, October 4, 2019, and December 13, 2019, at which meetings all directors attended.

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Audit Committee

Our audit committee is currently comprised of John W. Beck*, Steven Kelly, and Connie Matsui. Mr. Beck, serves as the chairperson of our audit committee. Ms. Erbez previously served as the chairperson of our audit committee before her departure. Our Board has determined that each member of our audit committee meets the requirements for independence and financial literacy under the applicable rules and regulations of the SEC and the listing standards of The Nasdaq Stock Market, LLC (“Nasdaq”) . Our Board has also determined that Mr. Beck is an “audit committee financial expert” as defined in the rules of the SEC and has the requisite financial sophistication as defined under the listing standards of Nasdaq. The responsibilities of our audit committee will include, among other things:

· selecting and hiring the independent registered public accounting firm to audit our financial statements;

· overseeing the performance of the independent registered public accounting firm and taking those actions as it deems necessary to satisfy itself that the accountants are independent of management;

· reviewing financial statements and discussing with management and the independent registered public accounting firm our annual audited and quarterly financial statements, the results of the independent audit and the quarterly reviews, and the reports and certifications regarding internal control over financial reporting and disclosure controls;

· preparing the audit committee report that the SEC requires to be included in our annual proxy statement;

· reviewing the adequacy and effectiveness of our internal controls and disclosure controls and procedures;

· overseeing our policies on risk assessment and risk management;

· reviewing related party transactions; and

· approving or, as required, pre-approving, all audit and all permissible non-audit services and fees to be performed by the independent registered public accounting firm.

Our audit committee operates under a written charter which satisfies the applicable rules and regulations of the SEC and the listing standards of Nasdaq , a copy of which can be found on our website at www.artelobio.com .

* On December 2, 2 019, Georgia Erbez resigned from the Board of Directors and the committees on which she was serving. On December 6, 2019, John W. Beck was appointed to the Board of Directors and as Chair of the Audit Committee .

Compensation Committee

Our compensation committee is currently comprised of Steven Kelly and Connie Matsui; Ms. Erbez also served on the compensation committee before her resignation in December 2019. Mr. Kelly serves as the chairperson of our compensation committee. Our Board has determined that each member of our compensation committee meets the requirements for independence under the applicable rules and regulations of the SEC and listing standards of Nasdaq. Each member of the compensation committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act. The purpose of our compensation committee will be to oversee our compensation policies, plans and benefit programs and to discharge the responsibilities of our Board relating to compensation of our executive officers. The responsibilities of our compensation committee will include, among other things:

· reviewing and approving or recommending to the Board for approval compensation of our executive officers and directors;

· overseeing our overall compensation philosophy and compensation policies, plans and benefit programs for service providers, including our executive officers;

· reviewing, approving and making recommendations to our Board regarding incentive compensation and equity plans; and

· administering our equity compensation plans.

Our compensation committee operates under a written charter, which satisfies the applicable rules and regulations of the SEC and the listing standards of Nasdaq, a copy of which can be found on our website at www.artelobio.com .

Corporate Governance and Nominating Committee

Our corporate governance and nominating committee is currently comprised of Douglas Blayney and R. Martin Emanuele. Mr. Blayney serves as chairperson of our corporate governance and nominating committee. Our Board has determined that all members of our nominating and corporate governance committee meet the requirements for independence under the applicable rules and regulations of Nasdaq listing standards. The responsibilities of our nominating and corporate governance committee will include, among other things:

· identifying, evaluating and selecting, or making recommendations to our Board regarding, nominees for election to our Board and its committees;

· evaluating the performance of our Board and of individual directors;

· considering and making recommendations to our Board regarding the composition of our Board and its committees; and

· developing and making recommendations to our Board regarding corporate governance guidelines and matters.

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Our nominating and corporate governance committee operates under a written charter, which satisfies the listing standards of Nasdaq , a copy of which can be found on our website at www.artelobio.com.

Code of Ethics

The Board has adopted a Code of Business Conduct and Ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and agents and representatives, including consultants. A copy of the Code of Business Conduct and Ethics is available on our website at www.artelobio.com. We intend to disclose future amendments to such code, or any waivers of its requirements, applicable to any principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions or our directors on our website identified above.

Family Relationships

There are no family relationships between any of our directors or executive officers.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors and persons who own more than 10% of a registered class of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our shares of common stock and other equity securities, on Forms 3, 4 and 5, respectively. Executive officers, directors and greater than 10% shareholders are required by the SEC regulations to furnish us with copies of all Section 16(a) reports they file.

Based solely on our review of the copies of such forms received by our company, or written representations from certain reporting persons that no Form 5s were required for those persons, we believe that, during the fiscal year ended August 31, 2019, all filing requirements applicable to our officers, directors and greater than 10% beneficial owners as well as our officers, directors and greater than 10% beneficial owners of our subsidiaries were complied with.

ITEM 11. EXECUTIVE COMPENSATION

The particulars of the compensation paid to the following persons:

(a)	our principal executive officer;
(b)	each of our two most highly compensated executive officers who were serving as executive officers at the end of the years ended August 31, 2019 and 2018 ; and
(c)	up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the years ended August 31, 2019 and 2018, who we will collectively refer to as the named executive officers of our company, are set out in the following summary compensation table, except that no disclosure is provided for any named executive officer, other than our principal executive officers, whose total compensation did not exceed $100,000 for the respective fiscal year:

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SUMMARY COMPENSATION TABLE
Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensa-tion ($)		Change in Pension Value and Nonqualified Deferred Compensa-tion Earnings ($)		All Other Compensa-tion ($)		Total ($)
Gregory D. Gorgas
President, CEO, CFO,	2019		209,369		-		-		138,058		-		-		-		347,427
Secretary, Treasurer and Director	2018		74,840		-		-		-		-		-		-		74,840

Outstanding Equity Awards at Fiscal Year-End

As of August 31, 2019, there was an option to purchase 75,000 shares of our common stock held by our named executive officer.

Executive Employment Agreements

On April 3, 2017, our Company entered into an employment agreement with Gregory D. Gorgas. On March 15, 2019, the compensation committee of the Board increased Mr. Gorgas’ salary by $10,000 per month, effective immediately.

On August 30, 2019, and effective as of June 20, 2019, the Company and Mr. Gorgas entered into an amended and restated employment agreement (the “Employment Agreement”).

Pursuant to the Employment Agreement, Mr. Gorgas will receive a base salary of $396,000 per year, less applicable withholdings, and he will be eligible to earn an annual target bonus of up to 50% of his base salary upon achievement of performance objectives to be determined by the Company’s board of directors or its compensation committee. Mr. Gorgas is also eligible to participate in any employee benefit plans sponsored by us.

In addition, in connection with his employment, we have granted Mr. Gorgas an option to purchase 75,000 shares of our common stock at $1.99 per share pursuant to our 2018 Equity Incentive Plan. The shares subject to this option award will vest, subject to Mr. Gorgas’ continued service through the applicable vesting date, ratably over 48 months starting on August 29, 2019, such that the option will be fully vested on August 29, 2023. The vesting of the option is also subject to certain vesting acceleration provisions pursuant to the Employment Agreement.

The Employment Agreement also provides that Company shall pay the premiums for a life insurance policy for Mr. Gorgas for coverage of up to $1,000,000, and Mr. Gorgas shall be entitled to select personal beneficiaries for 100% of the proceeds of such policy. Mr. Gorgas may also choose to pay any additional premiums to increase the coverage of this life insurance policy.

The Employment Agreement also provides benefits in connection with a termination of employment under specified circumstances. Under the terms of the Employment Agreement, if we terminate Mr. Gorgas’ employment other than for cause, death, or disability, or Mr. Gorgas terminates his employment for good reason, Mr. Gorgas will be entitled to receive, subject to his timely execution and non-revocation of a release of claims, non-disparagement and his continued adherence to the non-solicitation provision of the Employment Agreement the following benefits: (A) if his termination of service occurs within the period 3 months prior to and 12 months after a change of control of the Company, (i) a lump sum severance payment equal to (x) 12 months of his then-current base salary and (y) his prorated annual bonus at the target level of achievement for the year in which the termination occurs, (ii) reimbursements for Mr. Gorgas and his eligible dependents’ COBRA premiums for up to 12 months; and (iii) accelerated vesting as to 100% of Mr. Gorgas’ then-outstanding time-based and performance-based equity awards; or (B) if his termination of service occurs outside of the period 3 months prior to and 12 months after a change of control of the Company, (i) continuing monthly payments of his then-current base salary for 12 months, (ii) a lump sum payment equal to a pro-rata portion of his then-current year target bonus, (iii) reimbursements for Mr. Gorgas and his eligible dependents’ COBRA premiums for up to 12 months; and (iv) accelerated vesting as to (x) 100% of Mr. Gorgas’ then-outstanding time-based equity awards and (y) that portion of Mr. Gorgas’ then-outstanding performance based equity awards for the performance goals that had been satisfied at the time of termination or are expected to be satisfied.

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If any of the severance and other benefits provided for in the Employment Agreement or otherwise payable to Mr. Gorgas constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code and could be subject to excise tax under Section 4999 of the Internal Revenue Code, then such payments will be delivered in full or delivered as to such lesser extent which would result in no portion of such benefits being subject to excise tax, whichever results in the greater amount of after-tax benefits to Mr. Gorgas.

Director Compensation

The following table shows the compensation earned by persons who served on our Board of Directors during the fiscal year ended August 31, 2019, who are not one of our Named Executive Officers.

We granted stock options to purchase a total of 106,500 shares of common stock to our directors during the year ended August 31, 2019 and did not pay cash or any other compensation. Other than as set out below, we do not have any agreements for compensating our directors for their services in their capacity as directors, although such directors are expected in the future to receive stock options to purchase shares of our common stock as awarded by our Board.

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Connie Matsui		0		0		48,780		0		0		0		48,780
Douglas Bla yney		0		0		33,134		0		0		0		33,134
Georgia Erbez		0		0		40,957		0		0		0		40,957
R. Martin Emanuele		0		0		32,213		0		0		0		32,213
Steven Kelly		0		0		40,957		0		0		0		40,957

The stock options issued in the above table were options granted on August 29, 2019 to purchase shares of the Company’s common stock at an exercise price of $1.99 with an expiry date of August 29, 2029. The stock options vest on the earlier of six months after issuance or the date immediately preceding the 2020 annual meeting of stockholders.

Non-Employee Director Compensation Policy

We intend to compensate our Board members at a rate of $15,000-$20,000 per year beginning in their second year of service and at a rate of $20,000-$30,000 each year thereafter, subject to Board approval. We have agreed to reimburse Board members for any reasonable expenses incurred by them in connection with any travel requested by and on behalf of our Company.

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Employee Stock Plan

2018 Equity Incentive Plan

Our Board has adopted a 2018 Equity Incentive Plan (the “2018 Plan”), and our stockholders have approved it. Our 2018 Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code, to our employees and any parent and subsidiary corporations’ employees, and for the grant of nonstatutory stock options, restricted stock, restricted stock units, and stock appreciation rights to our employees, directors and consultants and our parent and subsidiary corporations’ employees and consultants.

Authorized Shares. A total of 500,000 shares of our common stock have been reserved for issuance pursuant to the 2018 Plan, of which options to purchase 261,750 shares of common stock are issued and outstanding December 11, 2019.

Plan Administration. Our board of directors or one or more committees appointed by our board of directors will administer the 2018 Plan. Our compensation committee of our board of directors currently administers our 2018 Plan. In addition, if we determine it is desirable to qualify transactions under the 2018 Plan as exempt under Rule 16b-3 of the Exchange Act, or Rule 16b-3, such transactions will be structured to satisfy the requirements for exemption under Rule 16b-3. Subject to the provisions of our 2018 Plan, the administrator has the power to administer the plan, including but not limited to, the power to determine the fair market value of our common stock, select the service providers to whom awards may be granted, determine the number of shares covered by each award, approve forms of award agreements for use under the 2018 Plan, determine the terms and conditions of awards (including, but not limited to, the exercise price, the time or times at which awards may be exercised, any vesting acceleration or waiver or forfeiture restrictions and any restriction or limitation regarding any award or the shares relating thereto), construe and interpret the terms of our 2018 Plan and awards granted under it, prescribe, amend and rescind rules relating to our 2018 Plan, including creating sub-plans, modify or amend each award, including but not limited to the discretionary authority to extend the post-termination exercisability period of awards (except no option or stock appreciation right will be extended past its original maximum term) and allow a participant to defer the receipt of payment of cash or the delivery of shares that would otherwise be due to such participant under an award). The administrator also has the authority to allow participants the opportunity to transfer outstanding awards to a financial institution or other person or entity selected by the administrator and to institute an exchange program by which outstanding awards may be surrendered or cancelled in exchange for awards of the same type, which may have a higher or lower exercise price and/or different terms, awards of a different type and/or cash or by which the exercise price of an outstanding award is increased or reduced. The administrator’s decisions, interpretations and other actions are final and binding on all participants.

Stock Options. We may grant stock options under the 2018 Plan. The exercise price of options granted under our 2018 Plan will at least be equal to 100% of the fair market value of our common stock on the date of grant. The term of an option may not exceed 10 years. With respect to any participant who owns more than 10% of the voting power of all classes of our outstanding stock, the term of an incentive stock option granted to such participant must not exceed five years and the exercise price must equal at least 110% of the fair market value on the grant date. The administrator will determine the methods of payment of the exercise price of an option, which may include cash, shares or other property acceptable to the administrator, as well as other types of consideration permitted by applicable law. After the termination of service of an employee, director or consultant, he or she may exercise his or her option, to the extent vested as of the termination date, for the period of time stated in his or her option agreement. Generally, if termination is due to death or disability, the option will remain exercisable for 6 months. In all other cases, in the absence of a specified time in an award agreement, the option will generally remain exercisable for 30 days following the termination of service. However, in no event may an option be exercised later than the expiration of its term. Subject to the provisions of our 2018 Plan, the administrator determines the other terms of options.

Stock Appreciation Rights. We may grant stock appreciation rights under our 2018 Plan. Stock appreciation rights allow the recipient to receive the appreciation in the fair market value of our common stock between the exercise date and the date of grant. Stock appreciation rights may not have a term exceeding 10 years. After the termination of service of an employee, director or consultant, he or she may exercise his or her stock appreciation right for the period of time stated in his or her option agreement. In the absence of a specified time in an award agreement, if termination is due to death or disability, the stock appreciation rights will remain exercisable for 6 months. In all other cases, in the absence of a specified time in an award agreement, the stock appreciation rights will remain exercisable for 30 days following the termination of service. However, in no event may a stock appreciation right be exercised later than the expiration of its term. Subject to the provisions of our 2018 Plan, the administrator determines the other terms of stock appreciation rights, including when such rights become exercisable and whether to pay any increased appreciation in cash or with shares of our common stock, or a combination thereof, except that the per share exercise price for the shares to be issued pursuant to the exercise of a stock appreciation right will be no less than 100% of the fair market value per share on the date of grant.

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Restricted Stock. We may grant restricted stock under our 2018 Plan. Restricted stock awards are grants of shares of our common stock that vest in accordance with terms and conditions established by the administrator. The administrator will determine the number of shares of restricted stock granted to any employee, director or consultant and, subject to the provisions of our 2018 Plan, will determine the terms and conditions of such awards. The administrator may impose whatever vesting conditions it determines to be appropriate (for example, the administrator may set restrictions based on the achievement of specific performance goals or continued service to us), except the administrator, in its sole discretion, may accelerate the time at which any restrictions will lapse or be removed. Recipients of restricted stock awards generally will have voting and dividend rights with respect to such shares upon grant without regard to vesting, unless the administrator provides otherwise. Shares of restricted stock that do not vest are subject to our right of repurchase or forfeiture.

Restricted Stock Units. We may grant restricted stock units under our 2018 Plan. Restricted stock units are bookkeeping entries representing an amount equal to the fair market value of one share of our common stock. Subject to the provisions of our 2018 Plan, the administrator determines the terms and conditions of restricted stock units, including the vesting criteria and the form and timing of payment. The administrator may set vesting criteria based upon the achievement of company-wide, divisional, business unit or individual goals (including, but not limited to, continued employment or service) or any other basis determined by the administrator in its discretion. The administrator, in its sole discretion, may pay earned restricted stock units in the form of cash, in shares or in some combination thereof. Notwithstanding the foregoing, the administrator, in its sole discretion, may accelerate the time at which any restrictions will lapse or be removed.

Non-Transferability of Awards. Unless the administrator provides otherwise, our 2018 Plan generally does not allow for the transfer of awards and only the recipient of an award may exercise an award during his or her lifetime. If the administrator makes an award transferrable, such award will contain such additional terms and conditions as the administrator deems appropriate.

Certain Adjustments. In the event of any dividend or other distribution, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of our shares or other securities, or other change in our corporate structure affecting our shares, to prevent diminution or enlargement of the benefits or potential benefits available under our 2018 Plan, the administrator will adjust the number and class of shares that may be delivered under our 2018 Plan and/or the number, class and price of shares covered by each outstanding award and the numerical share limits set forth in our 2018 Plan.

Dissolution or Liquidation. In the event of our proposed liquidation or dissolution, the administrator will notify participants as soon as practicable and, to the extent not exercised, all awards will terminate immediately prior to the consummation of such proposed transaction.

Merger or Change in Control. Our 2018 Plan provides that in the event of a merger or change in control, as defined under our 2018 Plan, each outstanding award will be treated as the administrator determines, without a participant’s consent. The administrator is not required to treat all awards, all awards held by a participant or all awards of the same type , similarly.

If a successor corporation does not assume or substitute for any outstanding award, then the participant will fully vest in and have the right to exercise all of his or her outstanding options and stock appreciation rights, all restrictions on restricted stock and restricted stock units will lapse, and for awards with performance-based vesting, unless specifically provided for otherwise under the applicable award agreement or other agreement or policy applicable to the participant, all performance goals or other vesting criteria will be deemed achieved at 100% of target levels and all other terms and conditions met. If an option or stock appreciation right is not assumed or substituted, the administrator will notify the participant in writing or electronically that such option or stock appreciation right will be exercisable for a period of time determined by the administrator in its sole discretion and the option or stock appreciation right will terminate upon the expiration of such period.

Clawback. Awards will be subject to any clawback policy of ours, and the administrator also may specify in an award agreement that the participant’s rights, payments, and/or benefits with respect to an award will be subject to reduction, cancellation, forfeiture, and/or recoupment upon the occurrence of certain specified events. Our board of directors may require a participant to forfeit, return, or reimburse us all or a portion of the award and/or shares issued under the award, any amounts paid under the award, and any payments or proceeds paid or provided upon disposition of the shares issued under the award in order to comply with such clawback policy or applicable laws.

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Amendment; Termination. The administrator has the authority to amend, alter, suspend or terminate our 2018 Plan, provided such action does not materially impair the rights of any participant. Our 2018 Plan automatically will terminate in 2028, unless we terminate it sooner.

Grants of Plan-Based Awards

During the fiscal year ended August 31, 2019 we granted stock options to purchase a total of 184,000 shares of common stock.

Option Exercises and Stock Vested

During our fiscal year ended August 31, 2019 there were no options exercised by our named officers.

Pension, Retirement or Similar Benefit Plans

There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the board of directors or a committee thereof.

Indebtedness of Directors, Senior Officers, Executive Officers and Other Management

None of our directors or executive officers or any associate or affiliate of our company during the last two fiscal years, is or has been indebted to our company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth, as of December 11, 2019, certain information with respect to the beneficial ownership of our common and preferred shares by each shareholder known by us to be the beneficial owner of more than 5% of our common and preferred shares, as well as by each of our current directors and executive officers as a group. Each person has sole voting and investment power with respect to the shares of common and preferred stock, except as otherwise indicated. Beneficial ownership consists of a direct interest in the shares of common and preferred stock, except as otherwise indicated.

Except as otherwise noted below, the address of each of the individuals and entities named in the table below is c/o Artelo Biosciences, Inc., 888 Prospect Street, Suite 210, La Jolla, California 92037. Beneficial ownership representing less than 1% is denoted with an asterisk (*).

Name and Address of Beneficial Owner	Shares Beneficially Owned	Percentage of Shares Benefici ally Owned
Directors and Named Executive Officers
Gregory D. Gorgas(1)	280,134 Common / Direct		8.19	%
Connie Matsui(2)	15,000 Common / Direct	*
Steven Kelly(3)	12,500 Common / Direct	*
Douglas Blayney(4)	12,500 Common / Direct	*
R. Martin Emanuele(5)	18,95 0 Common/Direct	*
John W. Beck (6)	2,500 Common / Direct	*

 

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All Current Directors and Executive Officers as a Group	341,584 Common	9.99	%
5% Stockholders
Peter O’Brien( 7 )	345,000 Common / Direct	10.09	%
David Moss (8)	249,0 58 Common / Direct	7.28	%

____________

*	Less than 1%
(1)	Consists of 253,809 shares held by Gregory Gorgas , option to purchase 7,815 s hares of common stock and warrants to purchase 18,510 shares of common stock that are exercisable within 60 days of December 11, 2019.
(2)	Consists of 15,000 shares held by Connie Matsui .
(3)	Consists of 12,500 shares held by Steven Kelly .
(4)	Consists of 12,500 shares held by Douglas Blayney .
(5)	Consists of 12,500 shares held by R. Marty Emanuele and option to purchase 6,450 shares of common stock that are exercisable within 60 days of December 11, 2019.
(6)	Consists of option to purchase 2,500 shares of common stock that are exercisable within 60 days of December 11, 2019.
(7)	Consists of 337,500 shares held by Peter O’Brien and 7,500 shares held by Blackrock Ventures, Ltd., an entity owned by Peter O’Brien.
(8)	Consists of 208,19 2 shares held by David Moss, and warrants to purchase 40,866 shares of common stock that are exercisable within 60 days of December 11, 2019.

Changes in Control

We are unaware of any contract or other arrangement or provisions of our Articles or Bylaws the operation of which may at a subsequent date result in a change of control of our company. There are not any provisions in our Articles or Bylaws, the operation of which would delay, defer, or prevent a change in control of our company.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Except as disclosed herein, no director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since the year ended August 31, 2019, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the year-end for the last three completed fiscal years:

The Company has an employment contract with a key employee, Mr. Gregory Gorgas, who is an officer of the Company. As of August 31, 2019, Mr. Gorgas was owed salary in the amount of $29,361 which was subsequently paid in September 2019. As of August 31, 2018 no salary is owed. During the year ended August 31, 2019 and 2018, $180,008 and $74,840 were paid as salary to Mr. Gorgas, respectively.

During the year ended August 31, 2019, Blackrock Ventures, Ltd., an entity owned by the Senior Vice President, European Operations, who is a major stockholder of the Company, provided $38,000 worth of consulting services to the Company. On March 15, 2019, the Board approved the issuance of 25,000 shares of our common stock valued at $240,000 in exchange for its prior services to the Company.

14

Director Independence

Our Board has undertaken a review of the independence of the directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. As a result of this review, our Board has determined that Ms. Matsui, Dr. Blayney, Mr. Kelly, Dr. Emanuele and Mr. Beck representing five of our six directors, are “independent directors” as defined under the rules of the Nasdaq Capital Market. Mr. Gorgas is not considered independent due to his service as an executive officer of the Company.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The aggregate fees billed for the most recently completed fiscal year ended August 31, 2019 and for fiscal year ended August 31, 2018 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:

Fee Category	Year Ended August 31, 2019		Year Ended August 31, 2018
Audit Fees	$	44,000	$	51,235
Audit-Related Fees		16,325		-
Tax Fees		4,450		-
All Other Fees		-		-
Total Fees	$	64,775	$	51,235

Our a udit c ommittee pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the a udit c ommittee either before or after the respective services were rendered.

Our Board has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

	ARTELO BIOSCIENCES, INC.
Dated December 18, 2019	By:	/s/ Gregory D. Gorgas
		Gregory D. Gorgas
		President, Chief Executive Officer, Chief Financial Officer, Treasurer and Director
		(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Dated: December 18, 2019		/s/ Gregory D. Gorgas
		Gregory D. Gorgas
		President, Chief Executive Officer, Chief Financial Officer, Treasurer and Director
		(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)
Dated: December 18 , 2019		/s/ *
		Connie Matsui
		Director
Dated: December 18, 2019		/s/ *
		Steven Kelly
		Director
Dated: December 18, 2019		/s/ *
		Douglas Blayney
		Director
Dated: December 18, 2019		/s/ *
		R. Martin Emanuele
		Director
Dated: December 18, 2019
		John W. Beck
		Director
	By:	* /s/ Gregory D. Gorgas
		Gregory D. Gorgas, as attorney in fact

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INDEX TO EXHIBITS

Exhibit Number	Description	Incorporated by Reference From Form
31.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Chief Executive Officer.	Filed herewith
32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Chief Financial Officer.	Filed herewith
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

17

 

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Gregory D. Gorgas, President of Artelo Biosciences, Inc., certify that:

1. I have reviewed this Form 10-K/A of Artelo Biosciences, Inc. (the “Registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d- 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure control and procedures to be designed under my supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

d) disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date: December 18, 2019

/s/ Gregory D. Gorgas

Gregory D. Gorgas

President, Chief Executive Officer,

Chief Financial Officer, Treasurer and Director

(Principal Executive Officer,

Principal Financial Officer and Principal Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Artelo Biosciences, Inc. (the "Company") on Form 10-K/A for the period ended August 31, 2019 as filed with the Securities and Exchange Commission on or about the date hereof (the "Report"), the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: December 18, 2019

/s/ Gregory D. Gorgas

Gregory D. Gorgas

President, Chief Executive Officer,

Chief Financial Officer, Treasurer and Director

(Principal Executive Officer,

Principal Financial Officer and Principal Accounting Officer)

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Aug. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Financial Statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States.

Basis of Consolidation

Basis of Consolidation

The financial statements have been prepared on a consolidated basis, with the Company’s wholly-owned subsidiaries, Trinity Reliant Ventures Limited, and Trinity Research & Development Limited.

Property, plant and equipment

Property, plant and equipment

Property and equipment are stated at cost. Depreciation is computed on the straight-line method. The depreciation and amortization methods are designed to amortize the cost of the assets over their estimated useful lives, in years, of the respective assets as follows:

Furniture and Fixtures 3 Years

Maintenance and repairs are charged to expense as incurred. Improvements of a major nature are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in income.

The long-lived assets of the Company are reviewed for impairment in accordance with ASC No. 360, “Property, Plant and Equipment” (“ASC No. 360”), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the year ended August 31, 2019, no impairment losses have been identified.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had $4,423,965 and $337,424 in cash and cash equivalents at August 31, 2019 and 2018, respectively.

Intangible Assets

Intangible Assets

The Company capitalizes certain costs to acquire intangible assets; if such assets are determined to have a finite useful life they are amortized on a straight-line basis over the estimated useful life.

The Company tests its intangible assets for impairment at least annually and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others and without limitation: a significant decline in the Company’s expected future cash flows; a sustained, significant decline in the Company’s stock price and market capitalization; a significant adverse change in legal factors or in the business climate of the Company’s segments; unanticipated competition; and slower growth rates.

Deferred Offering Costs

Deferred Offering Costs

Deferred offering costs were capitalized and consisted of fees and expenses incurred directly in connection with the Company’s offering that was completed during the year ended August 31, 2019. At the time of the completion of the offering the amounts were transferred to additional paid in capital. Deferred offering costs included legal and accounting costs.

Foreign Currency Transactions

Foreign Currency Transactions

Some of the Company’s planned operations are outside of the United States, which results in exposure to market risks from changes in foreign currency rates. The financial risk arise from the fluctuations in foreign exchange rates and the degrees of volatility in these rates. Currently the Company does not use derivative instruments to reduce its exposure to foreign currency risk. Nonmonetary assets and liabilities are translated at historical rates and monetary assets and liabilities are translated at exchange rates in effect at the end of the year. Revenues and expenses are translated at average rates for the year. Gains and losses from translation of foreign currency financial statements into U.S. dollars are included as other comprehensive income.

Financial Instruments

Financial Instruments

The Company follows ASC 820, “Fair Value Measurements and Disclosures”, which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Derivative Financial Instruments

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company used a Monte Carlo valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

Concentrations of Credit Risk

Concentrations of Credit Risk

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

Share-based Expenses

Share-based Expenses

ASC 718 “Compensation – Stock Compensation” prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

The Company has recently adopted the guidance included under ASU 2018-07, stock-based compensation issued to non-employees and consultants. Equity-Based Payments to non-employees are measured at grant-date fair value of the equity instruments that the Company is obligated to issue when the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. Equity-classified nonemployee share based payment awards are measured at the grant date

There were $425,110 and $290,004 share-based expenses for the year ending August 31, 2019 and 2018, respectively.

Deferred Income Taxes and Valuation Allowance

Deferred Income Taxes and Valuation Allowance

The Company accounts for income taxes under ASC 740 “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized as at August 31, 2019 and 2018.

Net Loss per Share of Common Stock

Net Loss per Share of Common Stock

The Company has adopted ASC Topic 260, ”Earnings per Share,” (“EPS”) which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.

For the years ended August 31, 2019 and 2018, potentially dilutive instruments are as follows:

	August 31, 2019		August 31, 2018
Warrants		2,334,937		495,306
Options		234,000		50,000
Total		2,568,937		545,306

Related Parties

Related Parties

The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

Prepaid Expenses and Deposits

Prepaid Expenses and Deposits

Prepaid expenses and deposits consist of security deposits paid.

Commitments and Contingencies

Commitments and Contingencies

The Company follows ASC 450-20, “Loss Contingencies,” to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In July 2017, the Financial Accounting Standards Board (“FASB”) issued a two-part Accounting Standards Update (“ASU”) No. 2017-11, I. Accounting for Certain Financial Instruments With Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests With a Scope Exception (“ASU 2017-11”).ASU 2017-11 amends guidance in FASB ASC 260, Earnings Per Share, FASB ASC 480, Distinguishing Liabilities from Equity, and FASB ASC 815, Derivatives and Hedging. The amendments in Part I of ASU 2017-11 change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. The amendments in Part II of ASU 2017-11 re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. ASU 2017-11 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 with early adoption permitted. We have early adopted this standard. Certain cash subscription agreements entered into by the Company contain embedded derivative features, which in accordance with the new guidance, do not give rise to an associated derivative liability.

The Company has considered all recent accounting pronouncements issued and determined that the adoption of these pronouncements would not have a material effect on the financial position, results of operations or cash flows of the Company.

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INTANGIBLE ASSET

12 Months Ended

Aug. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSET

NOTE 7 – INTANGIBLE ASSET

During the year ended August 31, 2019, the Company made a $1,500,000 payment and recorded stock payable of 61,297 shares of common stock, valued at $539,417 for the exercise of an option for an exclusive worldwide license to develop and commercialize products comprising or containing the compound NEO1940. The Company has capitalized the costs associated with acquiring the worldwide license as an intangible asset at a value of $2,039,417 as of August 31, 2019.

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EQUITY (Details 2) - $ / shares		12 Months Ended
		Aug. 31, 2019	Aug. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted during period		184,000	50,000
Equity Incentive Plan 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted during period		234,000
Equity Incentive Plan 2018 | Saoirse O'Sullivan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted during period	[1]	12,500
Exercise Price		$ 10.8
Vesting Commencement Date		Aug. 17, 2018
Expiration Date		Aug. 17, 2028
Equity Incentive Plan 2018 | R. Martin Emanuele, Ph.D.
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted during period	[1]	12,500
Exercise Price		$ 10.8
Vesting Commencement Date		Aug. 17, 2018
Expiration Date		Aug. 17, 2028
Equity Incentive Plan 2018 | Andy Yates, Ph.D.
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted during period	[1]	12,500
Exercise Price		$ 10.8
Vesting Commencement Date		Aug. 17, 2018
Expiration Date		Aug. 17, 2028
Equity Incentive Plan 2018 | Steven D. Reich, M.D.
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted during period	[2]	12,500
Exercise Price		$ 10.8
Vesting Commencement Date		Apr. 01, 2018
Expiration Date		Aug. 17, 2028
Equity Incentive Plan 2018 | Rob Prince
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted during period	[3]	2,500
Exercise Price		$ 3.12
Vesting Commencement Date		Jul. 18, 2019
Expiration Date		Jul. 18, 2029
Equity Incentive Plan 2018 | Gregory D. Gorgas
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted during period	[4]	75,000
Exercise Price		$ 1.99
Vesting Commencement Date		Aug. 29, 2019
Expiration Date		Aug. 29, 2029
Equity Incentive Plan 2018 | Connie Matsui
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted during period	[5]	26,500
Exercise Price		$ 1.99
Vesting Commencement Date		Aug. 29, 2019
Expiration Date		Aug. 29, 2029
Equity Incentive Plan 2018 | Douglas Blayney, MD
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted during period	[5]	18,000
Exercise Price		$ 1.99
Vesting Commencement Date		Aug. 29, 2019
Expiration Date		Aug. 29, 2029
Equity Incentive Plan 2018 | Georgia Erbez
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted during period	[5]	22,250
Exercise Price		$ 1.99
Vesting Commencement Date		Aug. 29, 2019
Expiration Date		Aug. 29, 2029
Equity Incentive Plan 2018 | R. Martin Emanuele, PhD
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted during period	[5]	17,500
Exercise Price		$ 1.99
Vesting Commencement Date		Aug. 29, 2019
Expiration Date		Aug. 29, 2019
Equity Incentive Plan 2018 | Steven Kelly
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted during period	[5]	22,250
Exercise Price		$ 1.99
Vesting Commencement Date		Aug. 29, 2019
Expiration Date		Aug. 29, 2029

[1] Twenty-five percent (25%) of the Shares subject to the Option shall vest on the Vesting Commencement Date, and one forty-eighth (1/48th) of the Shares subject to the Option shall vest each month thereafter on the same day of the month as the Vesting Commencement Date.

[2] The number of Shares that will vest upon the first day following the end of such Vesting Period (a "Vesting Date") will equal (i) the lesser of (a) the number of hours that the Company's Chief Executive Officer certifies Participant provided the Services during such Vesting Period or (b) 60, multiplied by (ii) a number of Shares equal to 350 divided by the exercise price per Share of the option. "Vesting Period" means each three-month period during the term of the consulting agreement, beginning on the Vesting Commencement Date.

[3] 100% vested

[4] The shares subject to this option award will vest, subject to Mr. Gorgas' continued service through the applicable vesting date, ratably over 48 months starting on August 29, 2019, such that the option will be fully vested on August 29, 2023.

[5] One Hundred percent (100%) of the Shares subject to the Option shall vest on the earlier to occur of (i) the date six (6) months from the Vesting Commencement Date or (ii) the date immediately preceding the 2020 annual meeting of stockholders, subject to Participant continuing to be a Service Provider through each such date.

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EQUITY (Detail Textuals 1)	1 Months Ended	12 Months Ended
	Jun. 25, 2019 Warrant $ / shares shares	Aug. 31, 2019 USD ($) $ / shares shares	Aug. 31, 2018 USD ($) $ / shares
Related Party Transaction [Line Items]
Number of units sold | shares	1,300,813
Value for issuance of common shares | $		$ 8,376,379	$ 1,386,613
Exercise price of warrants | $ / shares	$ 6.4575
Derivative liability | $		$ 29,501
Number of warrant purchase | Warrant	1
Number of purchase common stock shares | shares	1
Common stock, par value (in dollars per share) | $ / shares	$ 0.001	$ 0.001	$ 0.001
Warrant intrinsic value | $			$ 585,691
Over-allotment option
Related Party Transaction [Line Items]
Exercise price of warrants | $ / shares	$ 6.765
Number of warrant purchase | Warrant	104,065
Number of purchase common stock shares | shares	104,065
Percentage Of Underwriting Discounts And Commissions	8.00%
Terms of common stock warrant	3 years
Offering price, per unit | $ / shares	$ 6.15
Series A or Series B Common Stock Purchase Warrant
Related Party Transaction [Line Items]
Exercise price of warrants | $ / shares		$ 16.00
Derivative liability | $		$ 34,933
Stock purchase agreement | Series A or Series B Common Stock Purchase Warrant
Related Party Transaction [Line Items]
Warrant intrinsic value | $		$ 0
Stock purchase agreement | Series A or Series B Common Stock Purchase Warrant | Minimum
Related Party Transaction [Line Items]
Exercise price of warrants | $ / shares		$ 8.00
Stock purchase agreement | Series A or Series B Common Stock Purchase Warrant | Maximum
Related Party Transaction [Line Items]
Exercise price of warrants | $ / shares		$ 14.00
Five Directors
Related Party Transaction [Line Items]
Number of restricted shares award issued | shares		65,000
NEOMED
Related Party Transaction [Line Items]
Number of units sold | shares		72,660
Number of issuance of common shares | shares		61,297
Value for issuance of common shares | $		$ 539,417
Shares issued for settlement of accrued liability | shares		11,363
Value for shares issued for settlement of accrued liability | $		$ 100,000

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INTANGIBLE ASSET (Detail Textuals)	12 Months Ended
	Aug. 31, 2019 USD ($) shares
Indefinite-lived Intangible Assets [Line Items]
Payments to acquire intangible assets	$ 1,500,000
Intangible asset	2,039,417
NEO1940
Indefinite-lived Intangible Assets [Line Items]
Payments to acquire intangible assets	$ 1,500,000
Number of common stock payable recorded | shares	61,297
Amount of stock options exercise to develop product	$ 539,417
Intangible asset	$ 2,039,417

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Consolidated Balance Sheets - USD ($)	Aug. 31, 2019	Aug. 31, 2018
Current Assets
Cash and cash equivalents	$ 4,423,965	$ 337,424
Prepaid expenses	8,336	35,384
Deposits	1,500	1,500
Other receivable	8,787	22,127
Total Current Assets	4,442,588	396,435
Equipment, net of accumulated depreciation of $792 and $282, respectively	721	563
Intangible asset	2,039,417
TOTAL ASSETS	6,482,726	396,998
Current Liabilities
Accounts payable and accrued liabilities	348,863	529,272
Due to related party	3,732	2,700
Derivative liability	29,501
Stock payable	639,417
Total Current Liabilities	1,021,513	531,972
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock, par value $0.001, 6,250,000 shares authorized, 0 and 0 shares issued and outstanding as of August 31, 2019 and 2018, respectively
Common Stock, par value $0.001, 18,750,000 shares authorized, 3,353,616 and 1,750,268 shares issued and outstanding as of August 31, 2019 and 2018, respectively	3,354	1,750
Additional paid-in capital	10,278,421	2,514,136
Accumulated deficit	(4,810,756)	(2,638,580)
Accumulated other comprehensive loss	(9,806)	(12,280)
Total Stockholders' Equity (Deficit)	5,461,213	(134,974)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 6,482,726	$ 396,998

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Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Aug. 31, 2019	Aug. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (2,172,176)	$ (2,343,491)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation	425,110	290,004
Depreciation	510	282
Change in fair value of derivative	(1,006,099)
Stock payable	100,000
Changes in operating assets and liabilities:
Prepaid expenses	27,048	(35,384)
Other receivable	13,340	(22,127)
Accounts payable and accrued liabilities	(180,409)	500,696
Net cash used in operating activities	(2,792,676)	(1,610,020)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment	(688)	(845)
Purchase of license	(1,500,000)
Net cash used in investing activities	(1,500,688)	(845)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common shares for cash	8,376,379	1,386,613
Advance from related party	18,276	19,894
Repayment to related party	(17,228)	(18,056)
Net cash provided by financing activities	8,377,427	1,388,451
Effects on changes in foreign exchange rate	2,478	(12,937)
Net decrease in cash and cash equivalents	4,086,541	(235,351)
Cash and cash equivalents - beginning of period	337,424	572,775
Cash and cash equivalents - end of period	4,423,965	337,424
Supplemental Cash Flow
Cash paid for interest	0	0
Cash paid for income taxes	0	$ 0
Non-cash financing and investing activities:
Reclass of warrant derivative liability from equity	1,035,600
Stock payable for acquisition of license	539,417
Share issuance for price protection	$ 13

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EQUITY (Details 1)	12 Months Ended
	Aug. 31, 2019	Aug. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term	5 years	10 years
Expected volatility	158.00%	170.00%
Expected dividend yield	0.00%	0.00%
Risk free interest rate	1.40%	2.87%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals) - USD ($)	12 Months Ended
	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2017
Accounting Policies [Abstract]
Method of depreciation	Straight-line method
Cash and cash equivalents	$ 4,423,965	$ 337,424	$ 572,775
Share-based expenses	$ 425,110	$ 290,004

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DERIVATIVE LIABILITY AND FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Aug. 31, 2019

Derivative Liability And Fair Value Measurements [Abstract]

Summary of fair value of warrant liability

Fair value – August 31, 2018	$	-
Reclass of warrant derivative liability from equity		1,035,600
Change in fair value for the period of warrant derivative liability		(1,006,099	)
Fair value – August 31, 2019		29,501

Summary of pricing model of estimate fair value of derivative liability

	Year Ended August 31, 2019			Year Ended August 31, 2018
Assumptions for Pricing Model:
Expected term in years		0.46			-
Volatility		127	%		-
Risk-free interest rate	1.42%-2.10		%		-
Expected annual dividends		0	%		-

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DERIVATIVE LIABILITY AND FAIR VALUE MEASUREMENTS (Details 1) - Warrant - Percent	12 Months Ended
	Aug. 31, 2019	Aug. 31, 2018
Expected term in years
Derivative Liability And Fair Value Measurements [Line Items]
Derivative liability, measurement input expected term	5 months 16 days	0 years
Volatility
Derivative Liability And Fair Value Measurements [Line Items]
Derivative liability, measurement input	127	0
Risk-free interest rate
Derivative Liability And Fair Value Measurements [Line Items]
Derivative liability, measurement input		0
Risk-free interest rate | Minimum
Derivative Liability And Fair Value Measurements [Line Items]
Derivative liability, measurement input	1.42
Risk-free interest rate | Maximum
Derivative Liability And Fair Value Measurements [Line Items]
Derivative liability, measurement input	2.10
Expected annual dividends
Derivative Liability And Fair Value Measurements [Line Items]
Derivative liability, measurement input	0	0

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Consolidated Balance Sheets (Parentheticals) - USD ($)	Aug. 31, 2019	Aug. 31, 2018
Statement of Financial Position [Abstract]
Accumulated depreciation on equipment (in dollars)	$ 792	$ 282
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	6,250,000	6,250,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	18,750,000	18,750,000
Common stock, shares issued	3,353,616	1,750,268
Common stock, shares outstanding	3,353,616	1,750,268

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ORGANIZATION AND DESCRIPTION OF BUSINESS

12 Months Ended

Aug. 31, 2019

Organization And Description Of Business [Abstract]

ORGANIZATION AND DESCRIPTION OF BUSINESS

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

ARTELO BIOSCIENCES, INC. (the “Company”) is a Nevada corporation incorporated on May 2, 2011. It is based in San Diego County, California. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America, and the Company’s fiscal year end is August 31.

Effective on February 10, 2017, the Company changed its name from “KNIGHT KNOX DEVELOPMENT CORP.,” to “REACTIVE MEDICAL INC.” On April 14, 2017, the Company changed its name from “REACTIVE MEDICAL INC.” to “ARTELO BIOSCIENCES, INC”.

The Company registered fully owned subsidiaries in Ireland, Trinity Reliant Ventures Limited, on November 11, 2016 and in the UK, Trinity Research & Development Limited, on June 2, 2017. Operations in the subsidiaries have been consolidated in the financial statements.

The Company intends to license, develop and commercialize novel cannabinoid therapeutic treatments. To date, the Company’s activities have been limited to its formation and the raising of equity capital.

Reverse stock split

The Company filed a Certificate of Change with the Secretary of State of Nevada, pursuant to which, effective on June 20, 2019, the Company effected a one-for-eight reverse split of its authorized and issued and outstanding common stock (the “Reverse Stock Split”). The number of authorized shares of common stock was reduced from 150,000,000 to 18,750,000. The Company’s authorized Preferred Stock was reduced from 50,000,000 to 6,250,000. All share and per share information in these financial statements retroactively reflect this reverse stock split.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - shares	12 Months Ended
	Aug. 31, 2019	Aug. 31, 2018
Accounting Policies [Line Items]
Dilutive instruments	2,568,937	545,306
Options
Accounting Policies [Line Items]
Dilutive instruments	234,000	50,000
Warrant
Accounting Policies [Line Items]
Dilutive instruments	2,334,937	495,306

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PROVISION FOR INCOME TAXES (Tables)

12 Months Ended

Aug. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of deferred tax assets

	August 31,			August 31,
	2019			2018
NOL Carryover	$	(1,058,724	)	$	(578,959	)
Valuation allowance		1,058,724			578,959
Net deferred tax asset	$	-		$	-

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EQUITY (Details) - USD ($)	12 Months Ended
	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2017
Number Of Shares [Roll Forward]
Number of shares Outstanding	495,306	240,917
Number of warrant granted	1,839,575	254,389
Number of warrant forfeited	0	0
Number of warrant exercised	0	0
Number of shares Outstanding	2,334,881	495,306	240,917
Number Of Warrant Granted [Roll Forward]
Weighted Average Exercise Price, Outstanding	$ 10.40	$ 8.00
Weighted Average Exercise Price Granted	7.46	12.64
Weighted Average Exercise Price Forfeited	0	0
Weighted Average Exercise Price Exercised	0	0
Weighted Average Exercise Price, Outstanding	$ 8.15	$ 10.40	$ 8.00
Weighted Average Life [Roll Forward]
Weighted Average Life (years), Outstanding	4 years 1 month 21 days	4 years 2 months 23 days	4 years 9 months 29 days
Weighted Average Life (years), Granted	3 years 2 months 23 days	5 years

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DERIVATIVE LIABILITY AND FAIR VALUE MEASUREMENTS (Detail Textuals)	Aug. 31, 2019 $ / shares
Series D offering
Derivative Liability And Fair Value Measurements [Line Items]
Share price	$ 6
Series E offering
Derivative Liability And Fair Value Measurements [Line Items]
Share price	$ 7.60

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SUBSEQUENT EVENTS

12 Months Ended

Aug. 31, 2019

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 10 – SUBSEQUENT EVENTS

Management has evaluated subsequent events through the date these financial statements were issued. Based on our evaluation no events have occurred that require recognition or disclosure, other than those disclosed below.

Subsequent to August 31, 2019, the Company issued of 72,660 shares of common stock to NEOMED to settle $639,417 of stock payable. A total of 61,297 shares of common stock were issued for the exercise of an option for an exclusive worldwide license to develop and commercialize products comprising or containing the compound NEO1940. A total of 11,363 shares of common stock were issued to settle $100,000 of accrued liabilities with NEOMED.

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PROVISION FOR INCOME TAXES

12 Months Ended

Aug. 31, 2019

Income Tax Disclosure [Abstract]

PROVISION FOR INCOME TAXES

NOTE 6 - PROVISION FOR INCOME TAXES

The Company has not made provision for income taxes for the year end August 31, 2019 and 2018, since the Company has the benefit of net operating losses in these periods.

Due to uncertainties surrounding the Company’s ability to generate future taxable income to realize deferred income tax assets arising as a result of net operating losses carried forward, the Company has not recorded any deferred income tax asset as at August 31, 2019. The Company has incurred a net operating loss of $5,041,541, the net operating losses carry forward will begin to expire in varying amounts from year 2034 subject to its eligibility as determined by respective tax regulating authorities. The Company’s net operating loss carry forwards may be subject to annual limitations, which could eliminate, reduce or defer the utilization of the losses because of an ownership change as defined in Section 382 of the Internal Revenue Code. The Company’s federal tax returns remain subject to examination by the IRS.

On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”), was signed into law. The Tax Act includes numerous changes to tax laws impacting business, the most significant being a permanent reduction in the federal corporate income tax rate from 34% to 21%. The rate reduction took effect on January 1, 2018. As the Company’s 2018 fiscal year ended on August 31, 2018, the Company’s federal blended corporate tax rate for fiscal year 2018 is 25.3%, based on the applicable tax rates before and after the Tax Act and the number of days in the fiscal year to which the two different rates applied. 

Net deferred tax assets consist of the following components as of:

	August 31,			August 31,
	2019			2018
NOL Carryover	$	(1,058,724	)	$	(578,959	)
Valuation allowance		1,058,724			578,959
Net deferred tax asset	$	-		$	-

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DERIVATIVE LIABILITY AND FAIR VALUE MEASUREMENTS (Details)	12 Months Ended
	Aug. 31, 2019 USD ($)
Fair Value Of Warrant Liability Roll Forward
Change in fair value for the period of warrant derivative liability	$ 1,006,099
Fair value ? August 31, 2019	29,501
Warrant
Fair Value Of Warrant Liability Roll Forward
Fair value - August 31, 2018	0
Reclass of warrant derivative liability from equity	1,035,600
Change in fair value for the period of warrant derivative liability	(1,006,099)
Fair value ? August 31, 2019	$ 29,501

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EQUITY (Details 3) - $ / shares	12 Months Ended
	Aug. 31, 2019	Aug. 31, 2018
Number of Options Outstanding
Number of Options Outstanding	50,000	0
Number of shares granted during period	184,000	50,000
Number of Options Exercised	0	0
Number of Options Forfeited/canceled	0	0
Number of Options Outstanding	234,000	50,000
Weighted Average Exercise Price Options Outstanding
Weighted Average Exercise Price, Outstanding	$ 10.80	$ 0.00
Weighted Average Exercise Price, Granted	2.01	10.80
Weighted Average Exercise Price, Exercised	0.00	0.00
Weighted Average Exercise Price, Forfeited/canceled	0.00	0.00
Weighted Average Exercise Price, Outstanding	$ 3.88	$ 10.80
Weighted Average Remaining Contractual life (in years)	9 years 9 months 11 days	9 years 10 months 24 days
Options Outstanding, granted weighted average remaining life (years)	10 years	10 years

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EQUITY (Detail Textuals 2) - USD ($)		1 Months Ended			12 Months Ended
		Aug. 29, 2019	Jul. 18, 2019	Aug. 17, 2018	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options outstanding					234,000	50,000	0
Expected term					5 years	10 years
Expected volatility					158.00%	170.00%
Risk free interest rate					1.40%	2.87%
Expected dividend yield					0.00%	0.00%
Stock based compensation					$ 52,000	$ 56,835
Term of remaining life of stock options weighted average value					9 years 9 months 11 days	9 years 10 months 24 days
Number of shares granted during period					184,000	50,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value					$ 878,017	$ 536,688
Stock option granted for services					$ 133,110	107,169
Equity Incentive Plan 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares issued under options				375,000
Percentage of exercise price of incentive stock option granted to stockholder					10.00%
Percentage of grant date fair market value not less than ten percent exercise price of incentive stock option granted to stockholder					110.00%
Percentage of stock option vest on vesting commencement date					100.00%
Remains unamortized stock base expenses					$ 637,865	429,519
Stock based compensation					$ 1,333,110
Number of shares granted during period					234,000
Intrinsic value					$ 0	$ 0
Equity Incentive Plan 2018 | Director and consultants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price					$ 10.8
Number of shares granted during period				50,000
Expiration date under plan				Aug. 17, 2028
Equity Incentive Plan 2018 | Consultant
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price		$ 1.99	$ 3.12
Number of shares granted during period		181,500	2,500
Expiration date under plan		Aug. 29, 2029	Jul. 18, 2029
Equity Incentive Plan 2018 | Saoirse O'Sullivan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price					$ 10.8
Percentage of stock option vest on vesting commencement date					25.00%
Number of shares granted during period	[1]				12,500
Expiration date under plan					Aug. 17, 2028

[1] Twenty-five percent (25%) of the Shares subject to the Option shall vest on the Vesting Commencement Date, and one forty-eighth (1/48th) of the Shares subject to the Option shall vest each month thereafter on the same day of the month as the Vesting Commencement Date.

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GOING CONCERN (Detail Textuals) - USD ($)	12 Months Ended
	Aug. 31, 2019	Aug. 31, 2018
Going Concern [Abstract]
Net loss	$ (2,172,176)	$ (2,343,491)
Accumulated deficit	$ (4,810,756)	$ (2,638,580)

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ORGANIZATION AND DESCRIPTION OF BUSINESS (Detail Textuals) - shares	Aug. 31, 2019	Jun. 20, 2019	Aug. 31, 2018
Schedule Of Organization And Description Of Business [Line Items]
Common stock, shares authorized	18,750,000	150,000,000	18,750,000
Preferred stock, shares authorized	6,250,000	50,000,000	6,250,000

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Document And Entity Information - USD ($)	12 Months Ended
	Aug. 31, 2019	Dec. 11, 2019	Feb. 28, 2019
Document And Entity Information [Abstract]
Entity Registrant Name	ARTELO BIOSCIENCES, INC.
Entity Central Index Key	0001621221
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Current Fiscal Year End Date	--08-31
Entity Filer Category	Non-accelerated Filer
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding		3,420,026
Entity Public Float			$ 12,811,969
Document Type	10-K/A
Document Period End Date	Aug. 31, 2019
Amendment Flag	true
Amendment Description	Artelo Biosciences, Inc. (the "Company") is filing this Amendment No. 1 on Form 10-K/A (this "Amendment") to its Annual Report on Form 10-K for the period ended August 31, 2019, which was originally filed on November 25, 2019 (the "Original Filing"). The purpose of this Amendment is to amend and restate Part III.The Company does not anticipate filing its definitive proxy statement within 120 days of its fiscal year ended August 31, 2019. Therefore, the information required by Part III of Form 10-K will not be incorporated by reference to our definitive proxy statement for the 2020 Annual Meeting of Stockholders. Except as described above, this Amendment does not modify or update the disclosure in, or exhibits to, the Original Filing in any way, and the parts or exhibits of the Original Filing which have not been modified or updated are not included in this Amendment. Furthermore, this Form 10-K/A does not change any previously reported financial results, nor does it reflect events occurring after the filing date of the Original Filing. Information not affected by this Form 10-K/A remains unchanged and reflects the disclosures made at the time the Original Filing was filed. This Amendment continues to speak as of the date of the Original Filing and the Company has not updated the disclosure contained herein to reflect events that have occurred since the filing of the Original Filing. Accordingly, this Amendment should be read in conjunction with the Company's other filings made with the Securities and Exchange Commission since the filing of the Original Filing, including amendments to those filings, if any.
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false

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Consolidated Statements of Stockholders' Equity (Deficit) - USD ($)	Common Stock	Additional paid-in capital (deficiency)	Accumulated Deficit	Accumulated Other Comprehensive Income (loss)	Total
Balances at Aug. 31, 2017	$ 1,416	$ 837,853	$ (295,089)	$ 657	$ 544,837
Balances (in shares) at Aug. 31, 2017	1,415,908
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common shares issued for cash	$ 254	1,386,359			1,386,613
Common shares issued for cash (in shares)	254,360
Common shares issued for services - officers	$ 65	56,770			56,835
Common shares issued for services - officers (in shares)	65,000
Common shares issued for services	$ 15	125,985			126,000
Common shares issued for services (in shares)	15,000
Stock option granted for services		107,169			107,169
Net loss for the period			(2,343,491)		(2,343,491)
Other comprehensive gain (loss)				(12,937)	(12,937)
Balances at Aug. 31, 2018	$ 1,750	2,514,136	(2,638,580)	(12,280)	$ (134,974)
Balances (in shares) at Aug. 31, 2018	1,750,268				1,750,268
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common shares issued for cash	$ 1,566	8,374,813			$ 8,376,379
Common shares issued for cash (in shares)	1,565,388
Common shares issued for price protection	$ 13	(13)
Common shares issued for price protection (shares)	12,950
Common shares issued for services - officers		52,000			52,000
Common shares issued for services - related party	$ 25	239,975			240,000
Common shares issued for services - related party (shares)	25,000
Reclass of warrant derivative liability from equity		(1,035,600)			1,035,600
Stock option granted for services		133,110			$ 133,110
Reverse stock split adjustment (shares)	10				10
Net loss for the period			(2,172,176)		$ (2,172,176)
Other comprehensive gain (loss)				2,474	2,474
Balances at Aug. 31, 2019	$ 3,354	$ 10,278,421	$ (4,810,756)	$ (9,806)	$ 5,461,213
Balances (in shares) at Aug. 31, 2019	3,353,616				3,353,616

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GOING CONCERN

12 Months Ended

Aug. 31, 2019

Going Concern [Abstract]

GOING CONCERN

NOTE 3 - GOING CONCERN

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not established any revenue to cover its operating cost, and requires additional capital to continue its operating plan. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These factors raise substantial doubt about its ability to continue as a going concern.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company includes: sales of equity instruments; traditional financing, such as loans; and obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. During the year ended August 31, 2019, the Company had a net loss of $2,172,176. As of August 31, 2019, the Company had an accumulated deficit of $4,810,756 and has earned no revenues. The Company intends to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for future periods.

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EQUITY (Detail Textuals)			1 Months Ended			12 Months Ended
	Mar. 15, 2019 USD ($) Warrant shares	Mar. 15, 2018 Warrant $ / shares	Jun. 25, 2019 USD ($) Warrant $ / shares shares	Jan. 26, 2018 Warrant $ / shares	Jun. 30, 2017 USD ($) shares	Aug. 31, 2019 USD ($) Warrant $ / shares shares	Aug. 31, 2018 USD ($) $ / shares shares	Jun. 20, 2019 shares
Related Party Transaction [Line Items]
Common stock, par value (in dollars per share) | $ / shares			$ 0.001			$ 0.001	$ 0.001
Common stock, shares authorized						18,750,000	18,750,000	150,000,000
Preferred stock, par value (in dollars per share) | $ / shares						$ 0.001	$ 0.001
Preferred stock, shares authorized						6,250,000	6,250,000	50,000,000
Preferred stock, shares issued						0	0
Value for issuance of common shares | $						$ 8,376,379	$ 1,386,613
Proceeds from issuance of common stock | $						$ 8,376,379	1,386,613
Warrant intrinsic value | $							$ 585,691
Exercise price of warrants | $ / shares			$ 6.4575
Number of warrant purchase | Warrant			1
Number of purchase common stock shares | Warrant			1
Number of units sold			1,300,813
Reverse stock split adjustment (shares)						10
Number of warrant granted						1,839,575	254,389
Over-allotment option
Related Party Transaction [Line Items]
Share price | $ / shares			$ 0.01
Exercise price of warrants | $ / shares			$ 6.765
Number of warrant purchase | Warrant			104,065
Terms of common stock warrant			3 years
Offering price, per unit | $ / shares			$ 6.15
Number of additional shares purchased			195,121
Gross proceeds before deducting underwriting discounts and commissions | $			$ 8,001,911
Percentage Of Underwriting Discounts And Commissions			8.00%
Number of warrants sold			191,102
Proceeds from warrant exercises | $			$ 1,911
Series A or Series B Common Stock Purchase Warrant
Related Party Transaction [Line Items]
Exercise price of warrants | $ / shares						$ 16.00
Series D Common Stock Purchase Warrant
Related Party Transaction [Line Items]
Number of issuance of common shares						209,635
Value for issuance of common shares | $						$ 1,257,905
Share price | $ / shares						$ 6.00
Exercise price of warrants | $ / shares						$ 14.00
Number of warrant purchase | Warrant						1
Number of purchase common stock shares | Warrant						1
Terms of common stock warrant						5 years
Series E Common Stock Purchase Warrant
Related Party Transaction [Line Items]
Number of issuance of common shares						54,940
Value for issuance of common shares | $						$ 417,732
Share price | $ / shares						$ 7.60
Exercise price of warrants | $ / shares						$ 16.00
Number of warrant purchase | Warrant						1
Number of purchase common stock shares | Warrant						1
Terms of common stock warrant						3 years
Number of warrants issued for price protection						6,490
Subscription Agreement
Related Party Transaction [Line Items]
Common shares issued for services (in shares)					3,125
Common shares issued for services | $					$ 10,000
Subscription Agreement | Private placement
Related Party Transaction [Line Items]
Number of issuance of common shares						163,606
Value for issuance of common shares | $						$ 850,785
Share price | $ / shares						$ 5.20
Exercise price of warrants | $ / shares						$ 12.00
Number of warrant purchase | Warrant						1
Number of purchase common stock shares | Warrant						1
Terms of common stock warrant						5 years
Subscription Agreement | Series A Common Stock Purchase Warrant
Related Party Transaction [Line Items]
Exercise price of warrants | $ / shares		$ 1.50		$ 1.50
Number of warrant purchase | Warrant	1	1		1
Number of purchase common stock shares | Warrant	1	1		1
Terms of common stock warrant	5 years	5 years		5 years
Subscription Agreement | Series C Common Stock Purchase Warrant | Private placement
Related Party Transaction [Line Items]
Number of issuance of common shares						87,629
Value for issuance of common shares | $						$ 525,828
Share price | $ / shares						$ 14.00
Term of issuance of common stock						5 years
Number of warrant purchase | Warrant						1
Number of purchase common stock shares | Warrant						1
Offering price, per unit | $ / shares						$ 6.00
Common Stock
Related Party Transaction [Line Items]
Number of issuance of common shares						1,565,388	254,360
Value for issuance of common shares | $						$ 1,566	$ 254
Common shares issued for services (in shares)						1,603,348	334,360
Common shares issued for price protection | $						$ 13
Common shares issued for price protection (shares)						12,950
Reverse stock split adjustment (shares)						10
Additional paid-in capital (deficiency)
Related Party Transaction [Line Items]
Value for issuance of common shares | $						$ 8,374,813	$ 1,386,359
Common shares issued for price protection | $						$ (13)
NEOMED
Related Party Transaction [Line Items]
Number of issuance of common shares						61,297
Value for issuance of common shares | $						$ 539,417
Common shares issued for services (in shares)						15,000
Common shares issued for services | $						$ 126,000
Number of units sold						72,660
Blackrock Ventures, Ltd
Related Party Transaction [Line Items]
Number of issuance of common shares	25,000
Value for issuance of common shares | $	$ 240,000

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PROVISION FOR INCOME TAXES (Detail Textuals) - USD ($)	12 Months Ended
	Aug. 31, 2019	Aug. 31, 2018
Income Tax Disclosure [Line Items]
Statutory federal income tax rate		25.30%
Net operating losses carry forward	$ 5,041,541
2017
Income Tax Disclosure [Line Items]
Statutory federal income tax rate	35.00%
2018
Income Tax Disclosure [Line Items]
Statutory federal income tax rate	21.00%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Aug. 31, 2019

Accounting Policies [Abstract]

Schedule of estimated useful lives of assets

Furniture and Fixtures 3 Years

Schedule of dilutive instruments

	August 31, 2019		August 31, 2018
Warrants		2,334,937		495,306
Options		234,000		50,000
Total		2,568,937		545,306

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COMMITMENTS AND CONTINGENCIES

12 Months Ended

Aug. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 8 – COMMITMENTS AND CONTENGENCIES

The Company has certain financial commitments in relation to Research and Development contracts. As of August 31, 2019:

· The Company is invoiced monthly and quarterly in relation to several Research and Development contracts.

· The Company may be obligated to make additional payments related to Research and Development contracts entered into, dependent on the progress and milestones achieved through the programs.

· Our principal executive office is currently located at 888 Prospect Street, Suite 210, La Jolla, CA, 92037, U.S. Additionally, we have an office located at 29 Fitzwilliam Street Upper, Dublin 2 Ireland which serves as administrative space for managing our European subsidiaries: Trinity Reliant Ventures, Ltd (Ireland) and Trinity Research & Development, Ltd. (U.K.). We do not currently own any properties, laboratories, or manufacturing facilities. The leases for our office space are month-to-month.

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RELATED PARTY TRANSACTIONS

12 Months Ended

Aug. 31, 2019

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 4 - RELATED PARTY TRANSACTIONS

During the year ended August 31, 2019 and 2018, the president of the Company incurred $1,530 and $1,340 of expenses on behalf of the Company. The amounts owed to the related party as of August 31, 2019 and 2018 are $3,732 and $2,202, respectively. The amounts are non-interest bearing and have no terms of repayment.

During the year ended August 31, 2019 and 2018, the former President, and current Senior Vice President, European Operations, who is a major stockholder of the Company, paid for expenses on behalf of the Company for a total of $16,746 and $18,554, respectively. The amount of $17,228 and $18,056 was repaid during the year ended August 31, 2019 and 2018, respectively. The amounts owed to the related party as of August 31, 2019 and 2018 are $0 and $498, respectively. The amounts are non-interest bearing and have no terms of repayment.

During the year ended August 31, 2019, Blackrock Ventures, Ltd., an entity owned by the Senior Vice President, European Operations, who is a major stockholder of the Company, provided $38,000 worth of consulting services to the Company. On March 15, 2019, the Board approved the issuance of 25,000 shares of our common stock valued at $240,000 in exchange for its prior services to the Company.

On November 18, 2016, the former President of the Company transferred all of the 750,000 shares that he held to the Company’s current Senior Vice President, European Operations.

The Company has an employment contract with a key employee, Mr. Gregory Gorgas, who is an officer of the Company. As of August 31, 2019, and 2018 no salary is owed. During the year ended August 31, 2019 and 2018, $209,369 and $74,840 were paid as salary to Mr. Gorgas, respectively.

The amounts and terms of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent third parties.

Stock based compensation

On January 26, 2018, the Company received $65,000 from two related parties from shares issuance under subscription agreement. The amounts have been recorded as stock common stock issued and was be settled with shares of the Company subsequent to quarter end. The amounts of $65,000 with related parties is for the issuance of 99,999 common shares, purchase price of $0.65 and 12,500 warrants with an exercise price of $12 per share, and five years expiry date. (See note 5).

During the year ended August 31, 2019 and 2018, the company recorded $52,000 and $56,835 of stock compensation expense for all five members of the Company’s Board of Directors, respectively. The stock based compensation related to restricted stock awards issued in 2017.

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EQUITY (Details 4) - $ / shares	12 Months Ended
	Aug. 31, 2019	Aug. 31, 2018	Aug. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options outstanding	234,000	50,000	0
Weighted Average Remaining Contractual life (in years)	9 years 9 months 11 days	9 years 10 months 24 days
50,000
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options outstanding	50,000
Weighted Average Remaining Contractual life (in years)	8 years 11 months 19 days
Weighted Average Exercise Price	$ 10.80
Options Exercisable Number of shares	21,700
Options Exercisable Weighted Average Exercise Price	$ 10.80
2,500
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options outstanding	2,500
Weighted Average Remaining Contractual life (in years)	9 years 10 months 21 days
Weighted Average Exercise Price	$ 3.12
Options Exercisable Number of shares	2,500
Options Exercisable Weighted Average Exercise Price	$ 3.12
181,500
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options outstanding	181,500
Weighted Average Remaining Contractual life (in years)	10 years
Weighted Average Exercise Price	$ 1.99
Options Exercisable Number of shares	0
Options Exercisable Weighted Average Exercise Price	$ 0

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PROVISION FOR INCOME TAXES (Details 1) - USD ($)	Aug. 31, 2019	Aug. 31, 2018
Income Tax Disclosure [Abstract]
NOL Carryover	$ (1,058,724)	$ (578,959)
Valuation allowance	1,058,724	578,959
Net deferred tax asset	$ 0	$ 0

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DERIVATIVE LIABILITY AND FAIR VALUE MEASUREMENTS

12 Months Ended

Aug. 31, 2019

Derivative Liability And Fair Value Measurements [Abstract]

DERIVATIVE LIABILITY AND FAIR VALUE MEASUREMENTS

NOTE 9 – DERIVATIVE LIABILITY AND FAIR VALUE MEASUREMENTS

The Company recognized a derivative liability related to the purchase price protection clause associated with the Series D and Series E private offerings (Note 5). Additional units would be issued to the unit holder if the Company should issue common stock or the equivalent at a share price less than $6.00 per share (Series D) or a share price less than $7.60 (Series E). In accordance with ASC 815-10- Derivatives and Hedging we measured the derivative liability using a Monte Carlo pricing model. Accordingly, at the end of each quarterly reporting date, the derivative fair market value is re-measured and adjusted to current market value.

Changes in the fair value of the warrant liability were as follows:

Fair value – August 31, 2018	$	-
Reclass of warrant derivative liability from equity		1,035,600
Change in fair value for the period of warrant derivative liability		(1,006,099	)
Fair value – August 31, 2019		29,501

As of August 31, 2019, there is no derivative liability associated with Series D shares as they are freely tradable.

The Monte Carlo pricing model was used to estimate the fair value of the derivative liability and reflected the following assumptions:

	Year Ended August 31, 2019			Year Ended August 31, 2018
Assumptions for Pricing Model:
Expected term in years		0.46			-
Volatility		127	%		-
Risk-free interest rate	1.42%-2.10		%		-
Expected annual dividends		0	%		-

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EQUITY

12 Months Ended

Aug. 31, 2019

Equity [Abstract]

EQUITY

NOTE 5 - EQUITY

Preferred shares

The Company has authorized 6,250,000 shares of preferred stock with a par value of $0.001.

During the year ended August 31, 2019 and 2018, there were no issuance of preferred stock.

Common Shares

The Company has authorized 18,750,000 common stock with a par value of $0.001 per share. Each common stock entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

During the year ended August 31, 2019, the Company issued 1,603,348 shares of common stock as follows,

· The Company received cash of $1,257,905 for 209,635 units at a price of $6.00 per unit (a “Series D Unit”) pursuant to the Company’s Series D offering. Each Series D Unit consists of: (i) one (1) share of common stock; and (ii) one (1) Series D Common Stock Purchase Warrant to purchase one (1) share of common stock at a price of $14.00 per share, for a period of 5 years from the issue date.

· The Company received cash of $417,732 for 54,940 units at a price of $7.60 per unit (a “Series E Unit”) pursuant to the Company’s Series E Offering. Each Series E Unit consists of: (i) one (1) share of common stock; and (ii) one (1) Series E Common Stock Purchase Warrant to purchase one-half (1/2) share of common stock at a price of $16.00 per share for a period of 3 years from the issue date.

· On March 15, 2019, the Board approved the issuance of 25,000 shares of our common stock valued at $240,000 to Blackrock Ventures, Ltd., a Company owned by a former director, in exchange for its prior services to the Company.

· On June 25, 2019, the Company sold an aggregate of 1,300,813 units with each unit consisting of one (1) share of the Company’s common stock, par value $0.001 per share and a warrant to purchase one (1) share of common stock at an exercise price equal to $6.4575 per share. The offering price to the public was $6.15 per unit. In addition, the Company granted the Underwriters a 45-day option to purchase up to 195,121 additional shares of common stock, or warrants, or any combination thereof, to cover over-allotments, if any. Simultaneously with the closing of the offering the Company sold 191,102 warrants at $0.01 per warrant for cash proceeds of $1,911 upon the partial exercise of the underwriters’ over-allotment option. The Company received gross proceeds of approximately $8,001,911, before deducting underwriting discounts and commissions of eight percent (8%) of the gross proceeds and estimated offering expenses.

· The Company issued 12,950 shares and 6,490 warrants for price protection provision related to the Series E units. The company recorded the issuance at par value of $0.001, adjusting to additional paid in capital of $13.

· 10 shares were issued in related to a reconciliation of the reverse stock split.

During the year ended August 31, 2018, the Company issued 334,360 shares of common stock as follows,

· On January 2, 2018, the Company issued 15,000 shares of its common stock valued at $126,000 to NEOMED for services.

· The Company received $10,000 that has been recorded as stock issued in relation to a subscription agreement on June 30, 2017, for the issuance of 3,125 shares of common stock.

· The Company received cash of $850,785 that has been recorded for the issuance of 163,606 shares of common stock at a price of $5.20 per Unit pursuant to a private placement offering conducted by the Company in relation to subscription agreements accepted on January 26, 2018 and March 15, 2018. Each Unit consists of: (i) one (1) share of common stock; and (ii) one (1) Series B Common Stock Purchase Warrant to purchase one (1) share of common stock at a price of $12.00 per share for a period of 5 years from the issue date.

· The Company received cash of $525,828 that has been recorded for the issuance of 87,629 shares of common stock at a price of $6.00 per Unit pursuant to a private placement offering conducted by the Company in relation to subscription agreements accepted up to August 31, 2018. Each Unit consists of: (i) one (1) share of common stock; and (ii) one (1) Series C Common Stock Purchase Warrant to purchase one (1) share of common stock at a price of $14.00 per share for a period of 5 years from the issue date.   Per the terms of the subscription agreement, following the closing date until the earlier of (i) the date that the registration is declared effective by the SEC, or (ii) the date the shares become freely tradable, if the Company issues any common stock or common stock equivalent entitling the holder to acquire common stock at a price below $3.20, the Company will be required to issue the subscribers that number of additional units equal to the difference between the units issued at closing, and the number units the Company would have issued to the subscriber had the offering been completed at this discounted price. In accordance with ASU 2017-11, these cash subscription agreements entered into by the Company contain embedded derivative features, which in accordance with the new guidance, do not give rise to an associated derivative liability.

· The Company has issued 65,000 Restricted Shares Award (the “RSAs”) to five of the Company’s Directors, vesting annually over a four-year period, in each case subject to the director’s continued service to the Company. Refer to Note 4 for further discussion related to the RSAs.

Stock Payable

During the year ended August 31, 2019, the Company recorded stock payable of 72,660 shares of common stock to NEOMED as follows:

· 61,297 shares, valued at $539,417, for the exercise of an option for an exclusive worldwide license to develop and commercialize products comprising or containing the compound NEO1940. The worldwide license has been capitalized as an intangible asset

· 11,363 shares for settlement of accrued liability of $100,000

Warrants

In connection with the common stock sold pursuant to subscription agreements in fiscal year 2019, 2018 and 2017, each individual investor received warrants to purchase additional shares of common stock.

For each unit purchased in the Company’s Series A offering, Series B offering, Series C offering and Series D offering, each investor will receive one Series A, Series B, Series C and Series D Common Stock Purchase Warrant, respectively, to purchase one share of the Company’s common stock for a period of five years from the date of the subscription agreement at a price per share from $8.00 to $14.00, depending on the subscription round. For each unit purchased in the Company’s Series E offering, each investor will receive one Series E Common Stock Purchase Warrant to purchase one-half (1/2) share of the Company’s common stock for a period of three years from the date of the subscription agreement at a price per share of $16.00.

Under the terms of the subscription agreements for the Company’s private placement offerings, following the closing date of such private offering until the earlier of (i) the date that the registration statement of the shares issued in such offering is declared effective by the SEC, or (ii) the date the shares otherwise become freely tradable, if the Company issues any common stock or common stock equivalent entitling the new investor to acquire common stock at a price below the purchase price for that particular prior subscription agreement, the Company will be required to issue the prior investor additional units, each consisting of one share of common stock and a warrant to purchase one share of common stock, equal to the difference between the units actually issued at such closing to the new investor, and the number of units we would have issued to the prior investor had the offering been completed at this new, lower price per share. Management reviewed the terms of the agreements and determined that in accordance with ASC 815, these cash subscription agreements entered into by the Company contain derivative features. As of August 31, 2019, a derivative liability of $29,501 has been recorded.

During the year ended August 31, 2018, the Company issued warrants with the purchase of the Series A and Series B units. For each share purchased, the investor received one Series A or Series B or Series C Common Stock Purchase Warrant to purchase one share of the Company’s common stock for a period of five years from the date of the share subscription with ranges of prices from $8.00 per share to $14.00 per share. A total of 254,389 warrants were issued during the year ended August 31, 2018.

On June 25, 2019, the Company sold an aggregate of 1,300,813 units with each unit consisting of one (1) share of the Company’s common stock, par value $0.001 per share and a warrant to purchase one (1) share of common stock at an exercise price equal to $6.4575 per share.

In relation to the offering described above, the Company also agreed to issue to the underwriters warrants to purchase total of 104,065 shares of Common Stock (8% of the shares of Common Stock sold in the offering). The underwriter’s warrants are exercisable at $6.765 per share of common stock and have a term of three years. The warrants were issued for services provided by the underwriters.

A summary of activity of the warrants during the year ended August 31, 2019 and 2018 follows:

					Weighted
	Number of		Weighted Average		Average
	shares		Exercise Price		Life (years)
Outstanding, August 31, 2017		240,917	$	8.00		4.83
Granted		254,389		12.64		5.00
Forfeited		-		-		-
Exercised		-		-		-
Outstanding, August 31, 2018		495,306	$	10.40		4.23
Granted		1,839,575		7.46		3.23
Forfeited		-		-		-
Exercised		-		-		-
Outstanding, August 31, 2019		2,334,881	$	8.15		4.14

The intrinsic value of the warrants as of August 31, 2019 is $0. All of the outstanding warrants are exercisable as of August 31, 2019.

The intrinsic value of the warrants as of August 31, 2018 was $585,691.

2018 Equity Incentive Plan

On August 17, 2018, the Board of Directors of the Company approved the Equity Incentive Plan (the “2018 Plan”). The 2018 Plan permits the Company to issue up to 375,000 shares of common stock upon exercise of options granted to selected employees, officers, directors, consultants and advisers. The options may be either “incentive stock options” (as such term is defined in the Internal Revenue Code of 1986) or nonstatutory stock options that are not intended to qualify as “incentive stock options”. Incentive stock options may be granted only to employees. The 2018 Plan is administered by the Board or, at the discretion of the Board, a Board committee. The administrator determines who will receive options and the terms of the options, including the exercise price, expiration date, vesting and the number of shares. The exercise price of each stock option may not be less than the fair market value of the Common Stock on the date of grant, although the exercise price of any incentive stock option granted to a 10% stockholder may not be less than 110% of the fair market value on the grant date. Options may be exercisable (“vest”) immediately or in increments based on time and/or performance criteria as determined by the administrator. The term of any option may not exceed 10 years (five years for any incentive stock option granted to a 10% stockholder), and unless otherwise determined by the administrator, each option must terminate no later than three months after the termination of the optionee’s employment (one year in the event of death or disability). Subject to a few minor exceptions, options may not be transferred other than by will or by the laws of descent and distribution. The 2018 Plan will expire on August 17, 2028.

On August 17, 2018, the Company granted options to directors and consultants to purchase an aggregate of 50,000 shares of our common stock at a price of $10.8 per share with a various vesting schedule. The options expire August 17, 2028, unless such director and consultants ceases his or her service as a director or consultant prior the exercise or expiration of the option.

On July 18, 2019, the Company granted options to a consultant to purchase 2,500 shares of our common stock at a price of $3.12 per share. The options are immediately vested and expire July 18, 2029.

On August 29, 2019, the Company granted options to officers and directors to purchase an aggregate of 181,500 shares of our common stock at a price of $1.99 per share with a various vesting schedule. The options expire August 29, 2029.

The Company utilizes the Black-Scholes model to value the stock options. The Company utilized the following assumptions:

	Year Ended			Year Ended
	August 31,			August 31,
	2019			2018
Expected term	5 years			10 years
Expected average volatility		158	%		170	%
Expected dividend yield		-			-
Risk-free interest rate	1.40		%		2.87	%

Name	Number of Shares	Exercise Price	Vesting Commencement Date	Expiration Date	Vesting Schedule
Saoirse O’Sullivan	12,500	$10.8	August 17, 2018	August 17, 2028	(1)
R. Martin Emanuele, Ph.D.	12,500	$10.8	August 17, 2018	August 17, 2028	(1)
Andy Yates, Ph.D.	12,500	$10.8	August 17, 2018	August 17, 2028	(1)
Steven D. Reich, M.D.	12,500	$10.8	April 1, 2018	August 17, 2028	(2)
Rob Prince	2,500	$3.12	July 18, 2019	July 18, 2029	100% vested
Gregory D. Gorgas	75,000	$1.99	August 29, 2019	August 29, 2029	(3)
Connie Matsui	26,500	$1.99	August 29, 2019	August 29, 2029	(4)
Douglas Blayney, MD	18,000	$1.99	August 29, 2019	August 29, 2029	(4)
Georgia Erbez	22,250	$1.99	August 29, 2019	August 29, 2029	(4)
R. Martin Emanuele, PhD	17,500	$1.99	August 29, 2019	August 29, 2029	(4)
Steven Kelly	22,250	$1.99	August 29, 2019	August 29, 2029	(4)
Total option grants:	234,000

_________

(1)	Twenty-five percent (25%) of the Shares subject to the Option shall vest on the Vesting Commencement Date, and one forty-eighth (1/48th) of the Shares subject to the Option shall vest each month thereafter on the same day of the month as the Vesting Commencement Date.
(2)	The number of Shares that will vest upon the first day following the end of such Vesting Period (a “Vesting Date”) will equal (i) the lesser of (a) the number of hours that the Company’s Chief Executive Officer certifies Participant provided the Services during such Vesting Period or (b) 60, multiplied by (ii) a number of Shares equal to 350 divided by the exercise price per Share of the option. “Vesting Period” means each three-month period during the term of the consulting agreement, beginning on the Vesting Commencement Date.
(3)	The shares subject to this option award will vest, subject to Mr. Gorgas’ continued service through the applicable vesting date, ratably over 48 months starting on August 29, 2019, such that the option will be fully vested on August 29, 2023.
(4)	One Hundred percent (100%) of the Shares subject to the Option shall vest on the earlier to occur of (i) the date six (6) months from the Vesting Commencement Date or (ii) the date immediately preceding the 2020 annual meeting of stockholders, subject to Participant continuing to be a Service Provider through each such date.

During the year ended August 31, 2019, $133,110 was expensed, and as of August 31, 2019, $637,865 remains unamortized. During the year ended August 31, 2018, $107,169 was expensed, and as of August 31, 2018, $429,519 remained unamortized.

The following is a summary of stock option activity during the year ended August 31, 2019 and 2018:

	Options Outstanding				Weighted Average
	Number of		Weighted Average		Remaining life
	Options		Exercise Price		(years)
Outstanding, August 31, 2017		-	$	-	$	-
Granted		50,000		10.80		10.0
Exercised		-		-		-
Forfeited/canceled		-		-		-
Outstanding, August 31, 2018		50,000	$	10.80	$	9.97
Granted		184,000		2.01		10.0
Exercised		-		-		-
Forfeited/canceled		-		-		-
Outstanding, August 31, 2019		234,000	$	3.88	$	9.78

The following table summarizes information relating to exercisable stock options as of August 31, 2019:

Options Outstanding					Options Exercisable
Number of Options	Weighted Average Remaining		Weighted Average		Number of		Weighted Average
	Contractual life (in years)		Exercise Price		Shares		Exercise Price
50,000		8.97	$	10.80		21,700	$	10.80
2,500		9.89	$	3.12		2,500	$	3.12
181,500		10.00	$	1.99		-	$	-

The intrinsic value of the 234,000 options as of August 31, 2019 is $0. The intrinsic value of the 50,000 options outstanding as of August 31, 2018 was $0.

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EQUITY (Tables)

12 Months Ended

Aug. 31, 2019

Equity [Abstract]

Schedule of activity warrants outstanding

					Weighted
	Number of		Weighted Average		Average
	shares		Exercise Price		Life (years)
Outstanding, August 31, 2017		240,917	$	8.00		4.83
Granted		254,389		12.64		5.00
Forfeited		-		-		-
Exercised		-		-		-
Outstanding, August 31, 2018		495,306	$	10.40		4.23
Granted		1,839,575		7.46		3.23
Forfeited		-		-		-
Exercised		-		-		-
Outstanding, August 31, 2019		2,334,881	$	8.15		4.14

Schedule of assumptions to value the stock options

	Year Ended			Year Ended
	August 31,			August 31,
	2019			2018
Expected term	5 years			10 years
Expected average volatility		158	%		170	%
Expected dividend yield		-			-
Risk-free interest rate	1.40		%		2.87	%

Name	Number of Shares	Exercise Price	Vesting Commencement Date	Expiration Date	Vesting Schedule
Saoirse O’Sullivan	12,500	$10.8	August 17, 2018	August 17, 2028	(1)
R. Martin Emanuele, Ph.D.	12,500	$10.8	August 17, 2018	August 17, 2028	(1)
Andy Yates, Ph.D.	12,500	$10.8	August 17, 2018	August 17, 2028	(1)
Steven D. Reich, M.D.	12,500	$10.8	April 1, 2018	August 17, 2028	(2)
RobPrince	2,500	$3.12	July 18, 2019	July 18, 2029	100% vested
Gregory D. Gorgas	75,000	$1.99	August 29, 2019	August 29, 2029	(3)
Connie Matsui	26,500	$1.99	August 29, 2019	August 29, 2029	(4)
Douglas Blayney, MD	18,000	$1.99	August 29, 2019	August 29, 2029	(4)
Georgia Erbez	22,250	$1.99	August 29, 2019	August 29, 2029	(4)
R. Martin Emanuele, PhD	17,500	$1.99	August 29, 2019	August 29, 2029	(4)
Steven Kelly	22,250	$1.99	August 29, 2019	August 29, 2029	(4)
Total option grants:	234,000

_________

(1)	Twenty-five percent (25%) of the Shares subject to the Option shall vest on the Vesting Commencement Date, and one forty-eighth (1/48th) of the Shares subject to the Option shall vest each month thereafter on the same day of the month as the Vesting Commencement Date.
(2)	The number of Shares that will vest upon the first day following the end of such Vesting Period (a “Vesting Date”) will equal (i) the lesser of (a) the number of hours that the Company’s Chief Executive Officer certifies Participant provided the Services during such Vesting Period or (b) 60, multiplied by (ii) a number of Shares equal to 350 divided by the exercise price per Share of the option. “Vesting Period” means each three-month period during the term of the consulting agreement, beginning on the Vesting Commencement Date.
(3)	The shares subject to this option award will vest, subject to Mr. Gorgas’ continued service through the applicable vesting date, ratably over 48 months starting on August 29, 2019, such that the option will be fully vested on August 29, 2023.
(4)	One Hundred percent (100%) of the Shares subject to the Option shall vest on the earlier to occur of (i) the date six (6) months from the Vesting Commencement Date or (ii) the date immediately preceding the 2020 annual meeting of stockholders, subject to Participant continuing to be a Service Provider through each such date.

Schedule of stock option activity

	Options Outstanding				Weighted Average
	Number of		Weighted Average		Remaining life
	Options		Exercise Price		(years)
Outstanding, August 31, 2017		-	$	-	$	-
Granted		50,000		10.80		10.0
Exercised		-		-		-
Forfeited/canceled		-		-		-
Outstanding, August 31, 2018		50,000	$	10.80	$	9.97
Granted		184,000		2.01		10.0
Exercised		-		-		-
Forfeited/canceled		-		-		-
Outstanding, August 31, 2019		234,000	$	3.88	$	9.78

Schedule of exercisable stock options outstanding

Options Outstanding					Options Exercisable
Number of Options	Weighted Average Remaining		Weighted Average		Number of		Weighted Average
	Contractual life (in years)		Exercise Price		Shares		Exercise Price
50,000		8.97	$	10.80		21,700	$	10.80
2,500		9.89	$	3.12		2,500	$	3.12
181,500		10.00	$	1.99		-	$	-

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RELATED PARTY TRANSACTIONS (Detail Textuals)		1 Months Ended		12 Months Ended
	Mar. 15, 2019 USD ($) shares	Jan. 26, 2018 USD ($) RelatedParty $ / shares shares	Nov. 18, 2016 shares	Aug. 31, 2019 USD ($) shares	Aug. 31, 2018 USD ($) shares	Jun. 25, 2019 $ / shares	Aug. 31, 2017 shares
Related Party Transaction [Line Items]
Due to related party				$ 3,732	$ 2,700
Number of warrants | shares				2,334,881	495,306		240,917
Exercise price of warrants | $ / shares						$ 6.4575
Stock based compensation				$ 52,000	$ 56,835
Subscription agreement
Related Party Transaction [Line Items]
Amount of common shares issued for services to related parties		$ 65,000
Number of related parties | RelatedParty		2
Number of common shares issued for services to related parties | shares		99,999
Purchase price per share | $ / shares		$ 0.65
Number of warrants | shares		12,500
Exercise price of warrants | $ / shares		$ 12
Warrant expiration term		5 years
Former President, and current Senior Vice President, European Operations
Related Party Transaction [Line Items]
Expenses paid by related party				16,746	18,554
Due to related party				0	498
Repayments to related party				17,228	18,056
President
Related Party Transaction [Line Items]
Expenses paid by related party				1,530	1,340
Due to related party				3,732	2,202
Senior Vice President, European Operations
Related Party Transaction [Line Items]
Consulting services				38,000
Number of shares transferred by former President | shares			750,000
Amount of common shares issued for services to related parties	$ 240,000
Number of common shares issued for services to related parties | shares	25,000
Mr. Gregory Gorgas
Related Party Transaction [Line Items]
Payment of salary				$ 209,369	$ 74,840

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	12 Months Ended
	Aug. 31, 2019
Furniture and Fixtures
Accounting Policies [Line Items]
Estimated useful life	3 Years

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Aug. 31, 2019

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The financial statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Financial Statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States.

Basis of Consolidation

The financial statements have been prepared on a consolidated basis, with the Company’s wholly-owned subsidiaries, Trinity Reliant Ventures Limited, and Trinity Research & Development Limited.

Property, plant and equipment

Property and equipment are stated at cost. Depreciation is computed on the straight-line method. The depreciation and amortization methods are designed to amortize the cost of the assets over their estimated useful lives, in years, of the respective assets as follows:

Furniture and Fixtures 3 Years

Maintenance and repairs are charged to expense as incurred. Improvements of a major nature are capitalized. At the time of retirement or other disposition of property and equipment, the cost and accumulated depreciation are removed from the accounts and any gains or losses are reflected in income. 

The long-lived assets of the Company are reviewed for impairment in accordance with ASC No. 360, “Property, Plant and Equipment” (“ASC No. 360”), whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the year ended August 31, 2019, no impairment losses have been identified.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had $4,423,965 and $337,424 in cash and cash equivalents at August 31, 2019 and 2018, respectively.

Intangible Assets

The Company capitalizes certain costs to acquire intangible assets; if such assets are determined to have a finite useful life they are amortized on a straight-line basis over the estimated useful life.

The Company tests its intangible assets for impairment at least annually and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others and without limitation: a significant decline in the Company’s expected future cash flows; a sustained, significant decline in the Company’s stock price and market capitalization; a significant adverse change in legal factors or in the business climate of the Company’s segments; unanticipated competition; and slower growth rates.

Deferred Offering Costs

Deferred offering costs were capitalized and consisted of fees and expenses incurred directly in connection with the Company’s offering that was completed during the year ended August 31, 2019. At the time of the completion of the offering the amounts were transferred to additional paid in capital. Deferred offering costs included legal and accounting costs.

Foreign Currency Transactions

Some of the Company’s planned operations are outside of the United States, which results in exposure to market risks from changes in foreign currency rates. The financial risk arise from the fluctuations in foreign exchange rates and the degrees of volatility in these rates. Currently the Company does not use derivative instruments to reduce its exposure to foreign currency risk. Nonmonetary assets and liabilities are translated at historical rates and monetary assets and liabilities are translated at exchange rates in effect at the end of the year. Revenues and expenses are translated at average rates for the year. Gains and losses from translation of foreign currency financial statements into U.S. dollars are included as other comprehensive income.

Financial Instruments

The Company follows ASC 820, “Fair Value Measurements and Disclosures”, which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Derivative Financial Instruments

The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company used a Monte Carlo valuation model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

Concentrations of Credit Risk

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

Share-based Expenses

ASC 718 “Compensation – Stock Compensation” prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

The Company has recently adopted the guidance included under ASU 2018-07, stock-based compensation issued to non-employees and consultants. Equity-Based Payments to non-employees are measured at grant-date fair value of the equity instruments that the Company is obligated to issue when the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied. Equity-classified nonemployee share based payment awards are measured at the grant date

There were $425,110 and $290,004 share-based expenses for the year ending August 31, 2019 and 2018, respectively.

Deferred Income Taxes and Valuation Allowance

The Company accounts for income taxes under ASC 740 “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized as at August 31, 2019 and 2018.

Net Loss per Share of Common Stock

The Company has adopted ASC Topic 260, ”Earnings per Share,” (“EPS”) which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.

For the years ended August 31, 2019 and 2018, potentially dilutive instruments are as follows:

	August 31, 2019		August 31, 2018
Warrants		2,334,937		495,306
Options		234,000		50,000
Total		2,568,937		545,306

Related Parties

The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

Prepaid Expenses and Deposits

Prepaid expenses and deposits consist of security deposits paid.

Commitments and Contingencies

The Company follows ASC 450-20, “Loss Contingencies,” to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Recent Accounting Pronouncements

In July 2017, the Financial Accounting Standards Board (“FASB”) issued a two-part Accounting Standards Update (“ASU”) No. 2017-11, I. Accounting for Certain Financial Instruments With Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests With a Scope Exception (“ASU 2017-11”).ASU 2017-11 amends guidance in FASB ASC 260, Earnings Per Share, FASB ASC 480, Distinguishing Liabilities from Equity, and FASB ASC 815, Derivatives and Hedging. The amendments in Part I of ASU 2017-11 change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. The amendments in Part II of ASU 2017-11 re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. ASU 2017-11 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018 with early adoption permitted. We have early adopted this standard. Certain cash subscription agreements entered into by the Company contain embedded derivative features, which in accordance with the new guidance, do not give rise to an associated derivative liability.

The Company has considered all recent accounting pronouncements issued and determined that the adoption of these pronouncements would not have a material effect on the financial position, results of operations or cash flows of the Company.

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Consolidated Statements of Operations - USD ($)	12 Months Ended
	Aug. 31, 2019	Aug. 31, 2018
OPERATING EXPENSES
General and administrative	$ 952,334	$ 508,278
Professional fees	1,164,695	585,069
Research and development	1,091,992	1,249,854
Depreciation	510	290
Total Operating Expenses	3,209,531	2,343,491
Loss from Operations	(3,209,531)	(2,343,491)
OTHER INCOME (EXPENSE)
Other income	31,256
Change in fair value of derivative liabilities	1,006,099
Total other income	1,037,355
Provision for income taxes	0	0
NET LOSS	(2,172,176)	(2,343,491)
OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustments	2,474	(12,937)
Total Other Comprehensive Income Loss	2,474	(12,937)
TOTAL COMPREHENSIVE LOSS	$ (2,169,702)	$ (2,356,428)
Basic Loss per Common Share (in dollars per share)	$ (1.00)	$ (1.84)
Diluted Loss per Common Share (in dollars per share)	$ (1.46)	$ (1.84)
Basic Weighted Average Common Shares Outstanding (in shares)	2,172,465	1,277,527
Diluted Weighted Average Common Shares Outstanding (in shares)	2,172,465	1,277,527

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SUBSEQUENT EVENTS (Detail Textuals) - USD ($)	1 Months Ended	12 Months Ended
	Jun. 25, 2019	Aug. 31, 2019
Subsequent Event [Line Items]
Number of units sold	1,300,813
Stock payable		$ 639,417
NEO1940
Subsequent Event [Line Items]
Number of common stock payable recorded		61,297
NEOMED
Subsequent Event [Line Items]
Number of units sold		72,660
Shares issued for settlement of accrued liability		11,363
Value for shares issued for settlement of accrued liability		$ 100,000