STOCKHOLDERS EQUITY

12 Months Ended

Aug. 31, 2023

STOCKHOLDERS EQUITY

NOTE 8 - STOCKHOLDERS EQUITY

NOTE 7 – STOCKHOLDERS’ EQUITY

Dividends

During the year ended August 31, 2018, the Company issued Series A Convertible Preferred Stock, which accrues dividends at a rate of 5% annually. The Company exchanged the Series A Convertible Preferred for Series B Preferred Stock. As a result of the Exchange agreement, the dividends on the Series A Convertible Preferred Stock was reduced to $0 in the accompanying consolidated balance sheets. The Series B and Series B1 Convertible Preferred Stock accrues dividends at a rate of 10% annually. There was $1,748,625 and $837,798 of dividends payable at August 31, 2023 and August 31, 2022, respectively. The dividends have not been declared and are accrued in the accompanying condensed consolidated balance sheets as a result of a contractual obligation in the Company’s Series B and Series B1 Preferred Stock offering.

Preferred Stock

There were no shares of Series A Convertible Preferred Stock issued and outstanding as of August 31, 2023 and 2022, respectively.

There were 2,694,514 shares of Series B Convertible Preferred Stock issued and outstanding as of August 31, 2023, and August 31, 2022, respectively. There were 5,389,028 shares of Series B-1 Convertible Preferred Stock issued and outstanding as of August 31, 2023, and August 31, 2022, respectively.

Deemed Dividend related to Series B and B-1 Convertible Preferred Stock Down Round Provision

The Series B and Series B-1 Convertible Preferred Stock issued contain a down round provision. During the twelve months ended August 31, 2023, the Company entered into an agreement to issue common shares at $0.225 per share. Pursuant to the down round provision, the conversion price of the Series B and Series B-1 Convertible Preferred Stock was reduced to $0.225 per share at February 28, 2023. In addition, the Company recognized a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings, additional paid-in capital) of $7,180,301 at August 31, 2023. The deemed dividend represents the value attributed to the increase in shares of common stock that preferred shareholders will receive as a result of the issuance of common shares in February 2023, which was deemed to be adown round and triggered the anti-dilution provisions associated with our convertible preferred stock.

Common Stock

The Company is authorized to issue up to 200,000,000 shares of $0.001 par value common stock.

As discussed in Note 3 – Asset Acquisition, on November 9, 2021, the Company completed the acquisition of all of the assets, including intellectual property assets, relating to Mioxal®, a nutraceutical complex composed of essential amino acids, natural coenzymes and minerals, and assumed certain liabilities held by ST Biosciences, Ltd., a company organized under the laws of England and Wales (“STB”). As part consideration for the acquisition, the Company issued 19,831,623 shares of Common Stock valued at $40,654,827 or $2.05 per share. With the disposition of the Mioxal® asset, certain shareholders of the Company transferred 350,000 common shares to Ingenius.

During the twelve months ended August 31, 2023, the Company issued 450,000 of common stock to employees and a former Director of the Company. Included in the issuance was 100,000 shares previously classified as to be issued shares with a value of $22,500. The expense associated with the issuance is included in general and administrative expense on the condensed consolidated statements of operations.

There were 20,470,239 and 20,020,239 common shares issued and outstanding as of August 31, 2023 and 2022, respectively.

Warrants

During the twelve months ended August 31, 2023, the Company issued 7,552,320 warrants as part of the convertible notes financing, see Note 4 – Notes Payable. At August 31, 2023, the warrants had an intrinsic value of approximately $777,889.

At August 31, 2023, and 2022, the following warrants were outstanding:

	Number of warrants		Weighted average exercise price		Weighted average term remaining (years)
Balance, August 31, 2022		-	$	-		-
Issued		7,552,320		0.08		7
Balance, August 31, 2023		7,552,320	$	0.08		7