UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K
ANNUAL REPORT PURSUANT TO
SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended
August 31, 2019
Commission File No.
000-55852
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GRIDIRON
BIONUTRIENTS, INC.
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(Exact name of registrant as
specified in its charter)
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Nevada
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36-4797193
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(State or other jurisdiction
of
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(I.R.S. Employer
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incorporation or
organization)
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Identification No.)
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2701 Northgate Lane., Ste.
1G
Carson City, Nevada
89706
(Address of principal
executive offices, zip code)
(800)
570-0438
(Registrant’s telephone
number, including area code)
_____________________________________________________________
(Former name, former address
and former fiscal year, if changed since last report)
Securities registered
pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on
which registered
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Securities registered
pursuant to section 12(g) of the Act:
Common Stock, $.001 par
value
Indicate by check mark if
the registrant is a well-known seasoned issuer, as defined in Rule
405 of 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 past 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 and post such files). Yes x No o
Indicate by check mark if
disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. ¨
Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer”
and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one):
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Large accelerated filer
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¨
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Non-accelerated filer
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x
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Accelerated filer
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¨
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Smaller reporting company
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x
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(Do not check if a smaller reporting
company)
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Emerging growth company
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x
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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
At February 28, 2019, the
last business day of the Registrant’s most recently completed
second fiscal quarter, the aggregate market value of the voting
common stock held by non-affiliates of the Registrant (without
admitting that any person whose shares are not included in such
calculation is an affiliate) was $1,228,814. At December 12, 2019,
there were 135,509,220 shares of the Registrant’s common stock, par
value $0.001 per share, and 8,480,000 shares of Series A
Preferred Stock, par value $0.001 per share, outstanding.
GRIDIRON BIONUTRIENTS,
INC.
TABLE OF CONTENTS
FORWARD-LOOKING
STATEMENTS
This Annual Report on Form
10-K of GridIron BioNutrients, Inc., a Nevada corporation, contains
“forward-looking statements,” as defined in the United States
Private Securities Litigation Reform Act of 1995. In some cases,
you can identify forward-looking statements by terminology such as
“may”, “will”, “should”, “could”, “expects”, “plans”, “intends”,
“anticipates”, “believes”, “estimates”, “predicts”, “potential” or
“continue” or the negative of such terms and other comparable
terminology. These forward-looking statements include, without
limitation, statements about our market opportunity, our
strategies, competition, expected activities and expenditures as we
pursue our business plan, and the adequacy of our available cash
resources. Although we believe that the expectations reflected in
the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements.
Actual results may differ materially from the predictions discussed
in these forward-looking statements. The economic environment
within which we operate could materially affect our actual
results.
Our management has included
projections and estimates in this Form 10-K, which are based
primarily on management’s experience in the industry, assessments
of our results of operations, discussions and negotiations with
third parties and a review of information filed by our competitors
with the SEC or otherwise publicly available. We caution readers
not to place undue reliance on any such forward-looking statements,
which speak only as of the date made. We disclaim any obligation
subsequently to revise any forward-looking statements to reflect
events or circumstances after the date of such statements or to
reflect the occurrence of anticipated or unanticipated events.
All references in this Form
10-K to the “Company”, “GridIron BioNutrients”, “we”, “us,” or
“our” are to GridIron BioNutrients, Inc.
PART I
Our Corporate History and
Background
GridIron BioNutients, Inc.
(the “Company”) was incorporated on July 31, 2014 under the laws of
the State of Nevada. From our formation on July 31, 2014 until
October 9, 2017, we were engaged in the business of cloud storage
services. Sommay Vongsa served as President, Secretary, Treasurer
and sole director from July 31, 2014, until his resignation on
October 9, 2017. Concurrent with his resignation, Mr. Vongsa
appointed Darren Long, as the Company’s new Chief Executive
Officer, Secretary, Chairman of the board of directors, and
Secretary; Timothy Orr, as the Company’s new President and a
director; and Brian Martinho, as the Company’s new Treasurer and a
director. Effective February 26, 2018, Darren Long resigned as a
member and Chairman of the Board of Directors, and as Chief
Executive Officer, of the Company. Effective February 26, 2018,
Brian Martinho resigned as a member of the Board of Directors, and
as Treasurer, of the Company. Effective, February 27, 2018, Timothy
Orr, as the sole member of the Board of Directors, appointed
himself as Secretary and Treasurer of the Company. Mr. Orr is also
presently the Company’s President.
Effective November 28, 2017,
the board of directors and the stockholders of the majority of
voting power of the Company approved an amendment to the Company’s
Articles of Incorporation to change the name of the Company from
“My Cloudz, Inc.” to “GridIron BioNutrients, Inc.” A Certificate of
Amendment to the Articles of Incorporation effecting the change of
name of the Company was filed with the Secretary of State of the
State of Nevada effective November 27, 2017. The Financial Industry
Regulatory Authority, Inc. recognized the name change effective
December 18, 2017. Under Rule 14c-2, promulgated pursuant to the
Securities Exchange Act of 1934, as amended, the name change became
effective February 21, 2018.
From inception until we
completed our reverse acquisition of GridIron
BioNutrients, our principal business was cloud storage
services.
Reverse Acquisition of
GridIron BioNutrients
On October 9, 2017, the
Company entered into a Share Exchange Agreement (the “Share
Exchange Agreement”), by and among the Company, GridIron
BioNutrients, Inc., then a privately-held Nevada corporation since
renamed GridIron Ventures, Inc. (“GridIron Ventures”), and the
holders of common stock of GridIron Ventures. The holders of the
common stock of GridIron Ventures consisted of 3 stockholders.
Under the terms and
conditions of the Share Exchange Agreement, the Company offered,
sold and issued 70,000,000 shares of common stock in consideration
for all the issued and outstanding shares in GridIron Ventures. The
effect of the issuance was that GridIron Ventures shareholders held
approximately 57.0% of the issued and outstanding shares of common
stock of the Company, giving effect the Share Exchange
Agreement.
Darren Long, the founder of
GridIron Ventures, became the Company’s new Chief Executive
Officer, Chairman of the board of directors, and Secretary, was
then the holder of 35,000,000 shares of common stock of the
Company. Timothy Orr, became the Company’s new President, a
director of the Company, and the holder of 17,500,000 shares of
common stock of the Company. Brian Martinho, became the Company’s
new Treasurer, a director, and the holder of 17,500,000 shares of
common stock of the Company. The Company’s new officers and sole
director, therefore, control an aggregate of 70,000,000, or 57.0%,
of the outstanding common stock of the Company, on a fully diluted
basis, giving effect to the Share Exchange Agreement.
As a result of the Share
Exchange Agreement, GridIron Ventures became a wholly-owned
subsidiary of the Company.
The share exchange
transaction with GridIron Ventures was treated as a reverse
acquisition, with GridIron Ventures as the acquiror and the Company
as the acquired party. Unless the context suggests otherwise, when
we refer in this Form 10-K to business and financial information
for periods prior to the consummation of the reverse acquisition,
we are referring to the business and financial information of
GridIron Ventures.
Organization &
Subsidiaries
We have one operating
subsidiary, GridIron Ventures, Inc., a Nevada corporation.
Overview of GridIron
BioNutrients
Our wholly owned subsidiary,
GridIron Ventures was incorporated on July 20, 2017, in Nevada.
The business of GridIron
BioNutrients is now the principal business of the Company. GridIron
BioNutrients is in the business of marketing and selling
cannabidiol products line of capsules, oil, ointments, concentrates
and water.
GridIron BioNutrients
principal administrative offices are located at 2701 Northgate
Lane, Suite 1G, Carson City, Nevada 89706. Our website is
www.gridirionbionutrients.com.
Summary Financial
Information
The tables and information
below are derived from our audited financial statements as of
August 31, 2019.
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August 31,
2019
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Financial Summary
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Cash and Deposits
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$ |
18,975 |
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Total Assets
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256,414 |
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Total Liabilities
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224,053 |
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Total Stockholders’
Equity
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$ |
32,361 |
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Primary Business
GridIron BioNutrients is in
the business of marketing and selling cannabidiol products line of
capsules, oil, ointments, concentrates and water. GridIron
BioNutrients is the owner and has right to intellectual property,
including trademark, trade names, images, likenesses and other
associated intellectual property, such as the name “Gridion
BioNutrients”.
We intend to:
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establish a cannabidiol
products platform and brand;
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enter into agreements with
strategic partners in the cannabidiol products industry; and
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establish key exclusive
strategic alliances which serve to accomplish the task of becoming
the market leader.
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Principal
Products
Gridiron BioNutrients
principal products currently include:
Gridiron MVP™
Water Beverage (16.9oz)
Gridiron MVP™
Concentrate (2oz / 4oz)
These products contain a
proprietary blend of humic and fulvic acid, trace minerals,
probiotics, electrolytes, cannabidiol (CBD) within an alkaline of
pH10.
Gridiron has secured the
rights to this proprietary formulation through its CEO, Timothy
Orr. (VERBAL AGREEMENT). Timothy Orr provided the formulation in
connection with his receipt of 32,500,000 shares of common stock
from the Company on October 9, 2017.
Gridiron has the exclusive
right(s) to develop CBD products with this formulation. However,
Gridiron is limited to developing only CBD products with this
formulation and as such does not have any rights to develop
products that do not contain CBD with this formulation.
In addition to the Gridiron
MVP™ beverage and concentrate Gridiron currently has the following
products available to market:
Gridiron
Salve
Gridiron
Premium Hemp Oil Drops (1oz /2oz)
Gridiron
Premium Hemp Oil Capsules
Distribution of
Products
Gridiron’s products are
currently available for sale on its website
http://gridironbionutrients.com. The Company intends to retain a
consultant(s) to provide avenues to distribution its products
within the next twelve months. However, in order to retain any
consultant(s) the Company will require funding and currently the
Company does not have the required funding to accomplish this task.
If the Company is unable to secure financing; it would likely
result in a material loss of any investment made into the
Company.
Competition
Competition within the
cannabidiol (CBD) industry is intense with many well-established
companies within the market and numerous start-up companies
entering the market. Gridiron intends to brand and market high
quality CBD products through both exclusive and non-exclusive
strategic alliances that will serve to make the Company a market
leader.
In addition to the products
described herein the Company intends to add an additional CBD water
beverage to its product line within the next 4-5 months. The
Company can provide no assurance or guarantee that it will be able
to develop and/or maintain any strategic alliances now or in the
future or that its anticipated new CBD beverage will be accepted by
the market if and when developed. If the Company cannot develop and
maintain strategic alliances or be successful with the offer of its
CBD products and proposed CBD products it would be a significant
material negative impact on the business that could result in a
significant loss to any investment made into the Company.
Sources of Raw
Materials
Gridiron MVP™ product(s)
contain proprietary blend of nutrients that are sourced from
various third parties and formulated into the water beverage and
concentrate. If for any reason any of these sources are disrupted
and the Company is unable to obtain the raw materials necessary to
formulate the Gridiron MVP™ product(s) it would materially impact
the business that may result in significant losses. Moreover, the
Company will be dependent upon third party bottling facilities for
its Gridiron MVP™ product; currently the Company has no
arrangements or otherwise with any bottling facility and cannot
provide any assurance that a suitable bottling facility can be
retained or maintained in the future.
The Company currently has a
Distribution place for the Gridiron Salve, Gridiron Premium Hemp
Oil Drops (1oz /2oz) and Gridiron Premium Hemp Oil Capsules. If
there is a disruption with the manufacturer of these products for
any reason with the Company, it could result in significant delays
and/or the inability to deliver the products to customers which
would negatively impact the Company’s business.
Strategic
Partners
The Company intends to
develop both exclusive and non-exclusive strategic alliances that
promote the Company’s products.
Intellectual
Property
We rely on a combination of
trademark laws, trade secrets, confidentiality provisions and other
contractual provisions to protect our proprietary rights, which are
primarily our brand names, product designs and marks. We do not own
any patents.
The Company has filed four
trademark applications with the U.S. Patent & Trademark Office
(USPTO) as follows:
87594229 -
GRIDIRON BIONUTRIENTS in international class 005 (supplements)
87594267 -
GRIDIRON MVP in international class 005 (supplements)
87594303 -
GRIDIRON BIONUTRIENTS in international class 032 (beverages)
87594316 -
GRIDIRON MVP in international class 032 (beverages)
Timothy Orr, the Chief
Executive Officer and Chairman of the Board of Directors of the
Company, is providing the Gridiron MVP™ formulation(s) to the
Company at no charge to the Company. Gridiron has the exclusive
right(s) to develop CBD products with this formulation. However,
Gridiron is limited to developing only CBD products with this
formulation and as such does not have any rights to develop
products that do not contain CBD with this formulation.
The Company does not believe
that there is any legal limitation on its ability to enforce the
protection of its intellectual property due to federal and state
laws prohibiting the production and sale of CBD.
Government Regulation and
Approvals
We are not aware of any
governmental regulations or approvals needed for any of our
products. We do not believe that we are subject to any government
regulations relating to the ownership and licensing of our
intellectual property.
Cannabis
Regulation
Although a number of states
of the United States have legalized medical marijuana, recreational
marijuana, or both, it remains illegal under United States federal
law. Cannabis currently remains a Schedule I drug under the
Controlled Substances Act of 1970. Under United States federal law,
a Schedule I drug or substance has a high potential for abuse, no
accepted medical use in the United States, and a lack of accepted
safety for the use of the drug under medical supervision. As such,
cannabis related practices or activities, including without
limitation, the manufacture, importation, possession, use, or
distribution of cannabis, remain illegal under United States
federal law.
Although federally illegal,
the U.S. federal government’s approach to enforcement of such laws
has of least until recently trended toward non-enforcement. On
August 29, 2013, the U.S. Department of Justice (“DOJ”) issued a
memorandum known as the “Cole Memorandum” to all U.S. Attorneys’
offices (federal prosecutors). The Cole Memorandum generally
directed U.S. Attorneys not to prioritize the enforcement of
federal cannabis laws against individuals and businesses that
rigorously comply with state regulatory provisions in states with
strictly regulated medical or recreational cannabis programs. While
not legally binding, and merely prosecutorial guidance, the Cole
Memorandum laid a framework for managing the tension between state
and federal laws concerning state regulated cannabis
businesses.
However, on January 4, 2018
the Cole Memorandum was revoked by Attorney General Jeff Sessions,
a long-time opponent of state-regulated medical and recreational
cannabis. While this did not create a change in federal law, as the
Cole Memorandum was not itself law, the revocation removed the
DOJ’s guidance to U.S. Attorneys that state regulated cannabis
industries substantively in compliance with the Cole Memorandum’s
guidelines should not be a prosecutorial priority. In addition to
his revocation of the Cole Memorandum, Attorney General Sessions
also issued a one-page memorandum known as the “Sessions
Memorandum”. The Sessions Memorandum confirmed the rescission of
the Cole Memorandum and explained the rationale of the DOJ in doing
so: the Cole Memorandum, according to the Sessions Memorandum, was
“unnecessary” due to existing general enforcement guidance adopted
in the 1980s, as set forth in the U.S. Attorney’s Manual (the
“USAM”). The USAM enforcement priorities, like those of the Cole
Memorandum, are also based on the federal government’s limited
resources, and include “law enforcement priorities set by the
Attorney General,” the “seriousness” of the alleged crimes, the
“deterrent effect of criminal prosecution,” and “the cumulative
impact of particular crimes on the community.”
While the Sessions
Memorandum emphasizes that cannabis is a Schedule I controlled
substance, and reiterates the statutory view that cannabis is a
“dangerous drug and that marijuana activity is a serious crime,” it
does not otherwise indicate that the prosecution of
cannabis-related offenses is now a DOJ priority. Furthermore, the
Sessions Memorandum explicitly describes itself as a guide to
prosecutorial discretion. Such discretion is firmly in the hands of
U.S. Attorneys in deciding whether or not to prosecute
cannabis-related offenses. Our outside U.S. counsel continuously
monitors all U.S. Attorney comments related to regulated medical
and adult-use cannabis laws to assess various risks and enforcement
priorities within each jurisdiction. Dozens of U.S. Attorneys
across the country have affirmed that their view of federal
enforcement priorities has not changed, although a few have
displayed greater ambivalence.
On January 15, 2019, U.S.
Attorney General nominee William P. Barr intimated a markedly
different approach to cannabis regulation than his predecessor
during his confirmation hearing before the Senate Judiciary
Committee. Mr. Barr stated that his approach to cannabis regulation
would be not to upset settled expectations that have arisen as a
result of the Cole Memorandum, that it would be inappropriate to
upset the current situation as there has been reliance on the Cole
Memorandum and that he would not be targeting companies that have
relied on the Cole Memorandum and are complying with state laws
with respect to the distribution and production of cannabis. While
he did not offer support for cannabis legalization, Mr. Barr did
emphasize the need for the U.S. Congress to clarify federal laws to
address the untenable current situation which has resulted in a
backdoor nullification of federal law.
Additionally, under U.S.
federal law it may, under certain circumstances, be a violation of
federal money laundering statutes for financial institutions to
accept any proceeds from cannabis sales or any other Schedule I
controlled substances. Banks and other financial institutions could
be prosecuted and possibly convicted of money laundering for
providing services to U.S. cannabis businesses. Under U.S. federal
law, banks or other financial institutions that provide a cannabis
business with a checking account, debit or credit card, small
business loan or any other service could be found guilty of money
laundering or conspiracy. Despite these laws, in February 2014, the
Financial Crimes Enforcement Network (“FCEN”) of the Treasury
Department issued a memorandum (the “FCEN Memorandum”) providing
instructions to banks seeking to provide services to
cannabis-related businesses. The FCEN Memorandum states that in
some circumstances, it is permissible for banks to provide services
to cannabis-related businesses without risking prosecution for
violation of federal money laundering laws. It refers to
supplementary guidance that Deputy Attorney General Cole issued to
federal prosecutors relating to the prosecution of money laundering
offenses predicated on cannabis-related violations of the CSA. It
is unclear at this time whether the current administration will
follow the guidelines of the FCEN Memorandum.
Although we do not produces,
handle or sell cannabis, and the possession, cultivation and
distribution of marijuana for medical use is permitted in Nevada,
and medical and recreational use is permitted in the State of
Washington, where our administrative offices are located, provided
compliance with applicable state and local laws, rules, and
regulations, marijuana is illegal under federal law. We believe we
operate our business in compliance with applicable Nevada and
Washington law and regulations. Any changes in federal, state or
local law enforcement regarding marijuana may affect our ability to
operate our business. Strict enforcement of federal law regarding
marijuana would likely result in the inability to proceed with our
business plans, could expose us to potential criminal liability and
could subject our properties to civil forfeiture. Any changes in
banking, insurance or other business services may also affect our
ability to operate our business.
Employees
As of the date hereof, we
have 2 employees who operate our company. Timothy Orr, our sole
officer and director, works full-time on Company operations.
DESCRIPTION OF
PROPERTIES
Our executive offices are
located at 2701 Northgate Lane, Suite 1G, Carson City, Nevada
89706. Tim Orr holds the lease, which is month-to-month, under his
personal name.
We do not own any real
estate or other physical properties.
As a “smaller reporting
company,” as defined in Rule 12b-2 of the Exchange Act, we are not
required to provide the information called for by this Item.
None.
Our current business address
is 2701 Northgate Lane, Suite 1G, Carson City, Nevada 89706. We
believe that these spaces are adequate for our current needs. Our
telephone number is (800) 570-0438.
We are not currently
involved in any legal proceedings and we are not aware of any
pending or potential legal actions.
None.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Since September 7, 2018, our
shares of common stock have been quoted on the OTCQB tier of the
OTC Markets Group, Inc. (the “OTC Markets Group”) under the stock
symbol “GMVP.” From December 18, 2017 until September 6, 2018, our
shares of common stock were quoted on the OTCPink tier of the OTC
Markets Group. From February 6, 2017, until December 17, 2018, our
shares of common stock were quoted on the OTCPink tier of the OTC
Markets under the stock symbol “MYYZ”. The following table shows
the reported high and low closing bid prices per share for our
common stock based on information provided by the OTC Markets
Group. The over-the-counter market quotations set forth for our
common stock reflect inter-dealer prices, without retail mark-up,
mark-down or commission and may not necessarily represent actual
transactions.
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Common Stock
Bid Price
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Financial Quarter
Ended
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High ($)
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Low ($)
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November 30, 2019
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0.01 |
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0.01 |
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August 31, 2019
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0.02 |
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0.01 |
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May 31, 2019
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0.04 |
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0.03 |
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February 28, 2019
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0.25 |
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0.07 |
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November 30, 2018
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0.13 |
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0.05 |
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August 31, 2018
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0.30 |
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0.06 |
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May 31, 2018
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0.85 |
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0.11 |
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February 28, 2018
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5.00 |
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0.25 |
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HOLDERS
As of December 8, 2019, the
Company had approximately 135,509,220 shares of common stock issued
and outstanding held by approximately 85 holders of record.
During the year ended August 31, 2018, the
Company also has issued and outstanding 8,480,000 shares of
Series A Preferred Stock, held collectively by two holders of
record. Each share of Series A Preferred Stock has a dividend of 5%
per annum, has a liquidation preference senior to all other capital
stock of the Company, and is convertible at any time, at the
election of the holder of the Series A Preferred Stock, into one
share of common stock at a conversion price of $0.125 per share,
which conversion price is subject to adjustment for a term of two
(2) years for stock splits, stock dividends, combinations, or
similar events, and has full ratchet anti-dilution protection.
Additionally, each holder of Series A Preferred Stock and has
voting rights equal to that number of shares of common stock into
which such holder’s shares of Series A Preferred Stock would be
convertible on the record date for the vote or consent of
stockholders, and shall otherwise have voting rights and powers
equal to the voting rights and powers of the common stock. The
Company has a right to purchase any outstanding shares of Series A
Preferred Stock, with 20 days’ notice, at (i) a 115% premium before
180 days after the closing, and (ii) a 125% premium following the
181st day after closing. The holders of shares of Series A
Preferred Stock have a right to participate in 50% of all
financings of the Company, except for certain exempt offers and
sales, for a period of two (2) years following the closing or if
there are no shares of Series A Preferred Stock outstanding.
The Company also has issued
and outstanding two warrants to purchase 8,480,000 shares of common
stock, held collectively by two holders of record. Each warrant is
convertible into one share of common stock at a conversion price of
$0.165 per share, for a term of three years, and contains a
cashless exercise feature, if such warrant not registered in a
registration statement. The conversion price of $0.165 is subject
to adjustment for (i) stock splits, stock dividends, combinations,
or similar events and (ii) full ratchet anti-dilution protection.
The Company may call the warrants if shares of the Company’s common
stock trades at a volume weighted average price of not less than
$0.30 for ten (10) consecutive trading days and are covered by an
effective registration statement, where the average daily volume of
the common stock for the previous ten trading days has been greater
than $75,000.
DIVIDENDS
Historically, we have not
paid any dividends to the holders of our common stock and we do not
expect to pay any such dividends in the foreseeable future as we
expect to retain our future earnings for use in the operation and
expansion of our business. The Company's shares of Series A
Preferred Stock has a dividend which has been accrued as a dividend
payable in the amount of $23,695.
TRANSFER AGENT
Our transfer agent is Empire
Stock Transfer, Inc. (“Empire Stock Transfer”), whose address 1859
Whitney Mesa Dr., Henderson, Nevada 89014. Empire Stock Transfer’s
telephone number is (702) 818-5898.
RECENT SALES OF
UNREGISTERED SECURITIES
None.
SECURITIES AUTHORIZED FOR
ISSUANCE UNDER EQUITY COMPENSATION PLANS
We have not established any
compensation plans under which equity securities are authorized for
issuance.
PURCHASES OF EQUITY
SECURITIES BY THE REGISTRANT AND AFFILIATED PURCHASERS
None.
As a “smaller reporting
company,” as defined in Rule 12b-2 of the Exchange Act, we are not
required to provide the information called for by this Item.
OVERVIEW
The Company was incorporated
in the State of Nevada on July 31, 2014 and established a fiscal
year end of August 31.
CRITICAL ACCOUNTING
POLICIES
Basis of
Presentation
This summary of
accounting policies for Gridiron is presented to assist in
understanding the Company’s financial statements. The Company uses
the accrual basis of accounting and accounting principles generally
accepted in the United States of America (“GAAP” accounting) and
have been consistently applied in the preparation of the financial
statements.
Use of
Estimates
The preparation
of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities as of the date of the financial statements. Actual
results could differ from those estimates. Estimates are used when
accounting for fair value calculations related to embedded
conversion features of outstanding convertible notes payable.
Cash
For purposes of
the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months
or less to be cash equivalents to the extent the funds are not
being held for investment purposes. The Company had $18,975 and
$774,468 of cash and cash equivalents as of August 31, 2019 and
2018. As of August 31, 2018, the Company held cash of $524,468 with
one financial institution in excess of the FDIC insured limit of
$250,000.
Revenue
recognition
The Company
recognizes revenue under ASU No. 2014-09, “Revenue
from Contracts with Customers (Topic 606),” (“ASC
606”). The core principle of the revenue standard
is that a company should recognize revenue to depict the transfer
of promised goods or services to customers in an amount that
reflects the consideration to which the company expects to be
entitled in exchange for those goods or services. The Company only
applies the five-step model to contracts when it is probable that
the Company will collect the consideration it is entitled to in
exchange for the goods and services transferred to the
customer.
Revenue is
recognized when a customer obtains control of promised goods or
services and is recognized in an amount that reflects the
consideration that an entity expects to receive in exchange for
those goods or services. In addition, the standard requires
disclosure of the nature, amount, timing, and uncertainty of
revenue and cash flows arising from contracts with customers. The
amount of revenue that is recorded reflects the consideration that
the Company expects to receive in exchange for those goods. The
Company applies the following five-step model in order to determine
this amount: (i) identification of the promised goods in the
contract; (ii) determination of whether the promised goods are
performance obligations, including whether they are distinct in the
context of the contract; (iii) measurement of the transaction
price, including the constraint on variable consideration; (iv)
allocation of the transaction price to the performance obligations;
and (v) recognition of revenue when (or as) the Company satisfies
each performance obligation.
The Company only applies the five-step model to contracts
when it is probable that the entity will collect the consideration
it is entitled to in exchange for the goods transfers to the
customer. Once a contract is determined to be within the scope of
ASC 606 at contract inception, the Company reviews the contract to
determine which performance obligations the Company must deliver
and which of these performance obligations are distinct. The
Company recognizes as revenues the amount of the transaction price
that is allocated to the respective performance obligation when the
performance obligation is satisfied or as it is satisfied.
Generally, the Company’s performance obligations are transferred to
customers at a point in time, typically upon delivery.
Fair Value of
Financial Instruments
Fair value of
certain of the Company’s financial instruments including cash,
prepaid expenses, accounts payable, accrued expenses, notes
payable, and other accrued liabilities approximate cost because of
their short maturities. The Company measures and reports fair value
in accordance with ASC 820, “Fair Value Measurements and
Disclosure” defines fair value, establishes a framework for
measuring fair value in accordance with generally accepted
accounting principles and expands disclosures about fair value
investments.
Fair value, as
defined in ASC 820, is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value
of an asset should reflect its highest and best use by market
participants, principal (or most advantageous) markets, and an
in-use or an in-exchange valuation premise. The fair value of a
liability should reflect the risk of nonperformance, which
includes, among other things, the Company’s credit risk.
Valuation
techniques are generally classified into three categories: the
market approach; the income approach; and the cost approach. The
selection and application of one or more of the techniques may
require significant judgment and are primarily dependent upon the
characteristics of the asset or liability, and the quality and
availability of inputs. Valuation techniques used to measure fair
value under ASC 820 must maximize the use of observable inputs and
minimize the use of unobservable inputs. ASC 820 also provides fair
value hierarchy for inputs and resulting measurement as
follows:
Level 1: Quoted
prices (unadjusted) in active markets that are accessible at the
measurement date for identical assets or liabilities.
Level 2: Quoted
prices for similar assets or liabilities in active markets; quoted
prices for identical or similar assets or liabilities in markets
that are not active; inputs other than quoted prices that are
observable for the asset or liability; and inputs that are derived
principally from or corroborated by observable market data for
substantially the full term of the assets or liabilities; and
Level 3:
Unobservable inputs for the asset or liability that are supported
by little or no market activity, and that are significant to the
fair values.
Fair value
measurements are required to be disclosed by the Level within the
fair value hierarchy in which the fair value measurements in their
entirety fall. Fair value measurements using significant
unobservable inputs (in Level 3 measurements) are subject to
expanded disclosure requirements including a reconciliation of the
beginning and ending balances, separately presenting changes during
the period attributable to the following: (i) total gains or losses
for the period (realized and unrealized), segregating those gains
or losses included in earnings, and a description of where those
gains or losses included in earning are reported in the statement
of income.
As discussed in
Note 9 – Derivative Liability, the Company valued its
derivative liability using Level 3 inputs as of August 31, 2019 and
August 31, 2018. The Company did not identify any additional assets
or liabilities that are required to be presented on the balance
sheet at fair value in accordance with ASC 825-10 as of August 31,
2019 and 2018.
Derivative
Liabilities
The Company
generally does not use derivative financial instruments to hedge
exposures to cash flow or market risks. However, certain other
financial instruments, such as warrants and embedded conversion
features on the convertible debt, are classified as derivative
liabilities due to protection provisions within the
agreements. Convertible notes payable are initially
recorded at fair value using the Monte Carlo model and subsequently
adjusted to fair value at the close of each reporting period. The
preferred stock warrants are initially recorded at fair value using
the Black Scholes model and subsequently adjusted to fair value at
the close of each reporting period. The Company accounts for
derivative instruments and debt instruments in accordance with the
interpretive guidance of ASC 815, ASU 2017-11, and associated
pronouncements related to the classification and measurement of
warrants and instruments with conversion features.
Income
Taxes
Income taxes are
accounted for under the assets and liability method. Deferred tax
assets and liabilities are recognized for the estimated future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss and tax credit carry
forwards. Deferred tax assets and liabilities are measured using
enacted tax rates in effect for the year in which those temporary
differences are expected to be recovered or settled. Use of net
operating loss carry forwards for income tax purposes may be
limited by Internal Revenue Code section 382 if a change of
ownership occurs.
Principals of
Consolidation
The consolidated
financial statements represent the results of Gridiron
BioNutrients, Inc, its wholly owned subsidiary, Gridiron Ventures
and the assets, processes, and results therefrom. All intercompany
transactions and balances have been eliminated. All financial
information has been prepared in conformity with accounting
principles generally accepted in the United States of America.
Property and
Equipment
Property and
equipment are carried at cost. Expenditures for maintenance and
repairs are expensed in the period incurred. Renewals and
betterments that materially extend the life of the assets are
capitalized. When assets are retired or otherwise disposed of, the
cost and related accumulated depreciation are removed from the
accounts, and any resulting gain or loss is reflected in income for
the period.
Depreciation is
computed for financial statement purposes on a straight-line basis
over estimated useful lives of the related assets and the modified
accelerated cost recovery system for federal income tax purposes.
The estimated useful lives of depreciable assets are:
|
|
Estimated
Useful Lives
|
|
Computer and
other equipment
|
|
3 years
|
|
Vehicle
|
|
5 years
|
The Company’s
property and equipment consisted of the following as of August 31,
2019 and 2018:
|
|
|
August
31,
2019
|
|
|
August
31,
2018
|
|
|
Computer
Equipment
|
|
$ |
2,467 |
|
|
$ |
2,466 |
|
|
Vehicle
|
|
|
2,977 |
|
|
|
- |
|
|
Other
|
|
|
3,587 |
|
|
|
- |
|
|
Accumulated
depreciation
|
|
|
(2,446 |
) |
|
|
(529 |
) |
|
Net book
value
|
|
$ |
6,585 |
|
|
$ |
1,937 |
|
Depreciation
expense for the years ended August 31, 2019 and 2018 was $1,916 and
$530, respectively.
Inventories
Inventories
consist of raw materials, packing materials, bottled water and
concentrates, capsules, gummy products, drops and other items and
are stated at the lower of cost or net realizable value using the
first‑in, first‑out method. The Company periodically assesses the
recoverability of its inventory and reduces the carrying value of
the inventory when items are determined to be obsolete, defective
or in excess of forecasted sales requirements. Inventory
write‑downs for excess, defective and obsolete inventory are
recorded as a cost of revenue. During August 2019, the Company
wrote-off $40,136 of expired inventory, The Company did not have
any other write downs of inventory during the years ended August
31, 2019 and 2018. Inventory balances were $203,563 and $53,110 as
of August 31, 2019 and 2018, respectively.
A summary of the
Company’s inventory as of August 31, 2019 and 2018 is as
follows:
|
Type
|
|
August
31,
2019
|
|
|
August
31,
2018
|
|
|
Raw
Materials
|
|
$ |
19,477 |
|
|
$ |
33,010 |
|
|
Packaging
Materials
|
|
|
6,558 |
|
|
|
1,860 |
|
|
Gridrion Water
& Concentrates
|
|
|
126,773 |
|
|
|
10,566 |
|
|
Gridiron
Capsules
|
|
|
32,044 |
|
|
|
1,233 |
|
|
Gummy and Other
Products
|
|
|
18,710 |
|
|
|
6,440 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
Inventory
|
|
$ |
203,563 |
|
|
$ |
53,110 |
|
Basic Income
(Loss) Per Share
Basic income
(loss) per share is calculated by dividing the Company’s net loss
applicable to common shareholders by the weighted average number of
common shares during the period. Diluted earnings per share is
calculated by dividing the Company’s net income available to common
shareholders by the diluted weighted average number of shares
outstanding during the year. The diluted weighted average number of
shares outstanding is the basic weighted number of shares adjusted
for any potentially dilutive debt or equity. The conversion of
preferred shares, warrants and convertible debt to common shares
could potentially bring the number of common shares to a total of
approximately 194,000,000. The preferred conversion and warrants
would account for approximately 51,394,000 additional shares, the
convertible debt would account for approximately 7,096,900
additions shares and an additional 228,571 that have not been
issued yet, along with the 135,280,651 outstanding at August 31,
2019. The Company's convertible notes and warrants are excluded
from the computation of diluted earnings per share as they are
anti-dilutive due to the Company's losses for the years ended
August 31, 2019 and 2018.
Dividends
As discussed in
Note 5 – Stockholders Equity (Deficit), during the year
ended August 31, 2018, the Company issued preferred stock which
accrues dividends at a rate of 5% annually. There was $23,695 and
$4,192 of dividends payable at August 31, 2019 and August 31, 2018,
respectively. The dividends have not been declared and are accrued
in the accompanying consolidated balance sheets as a result of a
contractual obligation in the Company’s preferred stock
offering.
Advertising
Costs
The Company’s
policy regarding advertising is to expense advertising when
incurred. The Company incurred advertising costs totaling $94,443
and $61,812 during the years ended August 31, 2019 and 2018,
respectively.
Stock-Based
Compensation
The Company
accounts for share-based compensation in accordance with the fair
value recognition provisions of the Financial Accounting Standards
Board (“FASB”) Accounting Standards Codification (“ASC”) No. 718
and No. 505. After December 15, 2018, the scope of Topic 718,
Compensation—Stock Compensation, was expanded to include
share-based payments issued to nonemployees for goods and services.
The Company issues restricted stock to employees and consultants
for their services. Cost for these transactions are measured at the
fair value of the equity instruments issued at the date of grant.
These shares are considered fully vested and the fair market value
is recognized as expense in the period granted. The Company
recognized consulting expenses and a corresponding increase to
additional paid-in-capital related to stock issued for services.
For agreements requiring future services, the consulting expense is
to be recognized ratably over the requisite service
period.
There was
$18,775 and $-0- of stock-based compensation during the years ended
August 31, 2019 and 2018, respectively.
Related
Parties
The registrant
follows subtopic 850-10 of the FASB Accounting Standards
Codification for the identification of related parties and
disclosure of related party transactions.
Pursuant to
Section 850-10-20 the Related parties include (a) affiliates of the
registrant; (b) entities for which investments in their equity
securities would be required, absent the election of the fair value
option under the Fair Value Option Subsection of Section 825–10–15,
to be accounted for by the equity method by the investing entity;
(c) trusts for the benefit of employees, such as pension and
profit-sharing trusts that are managed by or under the trusteeship
of management; (d) principal owners of the registrant; (e)
management of the registrant; (f) other parties with which the
registrant may deal if one party controls or can significantly
influence the management or operating policies of the other to an
extent that one of the transacting parties might be prevented from
fully pursuing its own separate interests; and (g) Other parties
that can significantly influence the management or operating
policies of the transacting parties or that have an ownership
interest in one of the transacting parties and can significantly
influence the other to an extent that one or more of the
transacting parties might be prevented from fully pursuing its own
separate interests.
The financial
statements shall include disclosures of material related party
transactions, other than compensation arrangements, expense
allowances, and other similar items in the ordinary course of
business. However, disclosure of transactions that are eliminated
in the preparation of consolidated or combined financial statements
is not required in those statements. The disclosures shall include:
(a) the nature of the relationship(s) involved; (b) description of
the transactions, including transactions to which no amounts or
nominal amounts were ascribed, for each of the periods for which
income statements are presented, and such other information deemed
necessary to an understanding of the effects of the transactions on
the financial statements; (c) the dollar amounts of transactions
for each of the periods for which income statements are presented
and the effects of any change in the method of establishing the
terms from that used in the preceding period; and (d) amounts due
from or to related parties as of the date of each balance sheet
presented and, if not otherwise apparent, the terms and manner of
settlement.
Recently
Issued Accounting Standards
In August 2018,
the SEC adopted the final rule under SEC Release No. 33-10532,
”Disclosure Update and Simplification,” amending certain
disclosure requirements that were redundant, duplicative,
overlapping, outdated or superseded. In addition, the amendments
expanded the disclosure requirements on the analysis of
stockholders’ equity for interim financial statements. Under the
amendments, an analysis of changes in each caption of stockholders’
equity presented in the balance sheet must be provided in a note or
separate statement. This analysis should present a reconciliation
of the beginning balance to the ending balance of each period for
which a statement of comprehensive income is required to be filed.
This final rule was effective as of November 5, 2018. The adoption
of this final rule did not have a material impact on the financial
statements.
In June 2018,
the FASB issued ASU 2018-07, ”Compensation – Stock Compensation
(Topic 718): Improvements to Nonemployee Share-Based Payment
Accounting,” which expands the scope of Topic 718 to include
all share-based payment transactions for acquiring goods and
services from non-employees. This pronouncement is effective for
fiscal years, and for interim periods within those fiscal years,
beginning after December 15, 2018, with early adoption permitted.
The Company elected to early-adopt this standard in the current
period; the adoption of this standard did not impact the financial
statements.
In November
2016, the FASB issued ASU 2016-18, ”Statement of Cash Flows
(Topic 230): Restricted Cash,” which provides amendments to
current guidance to address the classifications and presentation of
changes in restricted cash in the statement of cash flows. The
effective date for the standard is for fiscal years beginning after
December 15, 2017. The Company adopted the standard effective
September 1, 2018; the adoption of this standard did not have
a material impact on the financial statements.
In October 2016,
the FASB issued ASU 2016-16, “Income Taxes (Topic 740):
Intra-Entity Transfers of Assets Other Than Inventory.” The
amendments in this update will require recognition of current and
deferred income taxes resulting from an intra-entity transfer of an
asset other than inventory when the transfer occurs. This update is
effective for annual and interim periods beginning after December
15, 2017. The Company adopted the standard effective September
1, 2018; the adoption of this standard did not have a material
impact on the financial statements.
In June 2016,
the FASB issued ASU 2016-13, ”Financial Instruments – Credit
Losses (Topic 326)” which introduces new guidance for the
accounting for credit losses on instruments within its scope. The
new guidance introduces an approach based on expected losses to
estimate credit losses on certain types of financial instruments.
For trade receivables, the Company will be required to use a
forward-looking expected loss model rather than the incurred loss
model for recognizing credit losses which reflects losses that are
probable. Credit losses relating to available-for-sale debt
securities will also be recorded through an allowance for credit
losses rather than as a reduction in the amortized cost basis of
the securities. The guidance is effective for fiscal years
beginning after December 31, 2019, including interim periods within
those years. Early application of the guidance is permitted for all
entities for fiscal years beginning after December 15, 2018,
including the interim periods within those fiscal years.
Application of the amendments is through a cumulative-effect
adjustment to retained earnings as of the effective date. The
Company does not expect the adoption of this final rule to have a
material impact on the financial statements.
In February
2016, the FASB issued ASU 2016-02, “Leases (Topic
842),” which supersedes the guidance in ASC 840,
”Leases.” The purpose of the new standard is to improve
transparency and comparability related to the accounting and
reporting of leasing arrangements. The guidance will require
balance sheet recognition for assets and liabilities associated
with rights and obligations created by leases with terms greater
than twelve months. The guidance is effective for fiscal years
beginning after December 15, 2018, including interim periods within
those years. Although the standard initially required the modified
retrospective approach for adoption, in July 2018, the FASB issued
ASU 2018-18, allowing companies to initially apply the new lease
requirements at the effective date and recognize a
cumulative-effect adjustment to the opening balance of retained
earnings in the period of adoption. Early adoption is permitted.
The Company does not expect the adoption of this final rule to have
a material impact on the financial statements.
In February
2018, the Financial Accounting Standards Board (FASB) issued
Accounting Standards Update (ASU) 2018-02, Income Statement
Reporting, Comprehensive Income (Topic 220). Effective for all
entities for fiscal years beginning after December 15, 2018, and
interim periods within those fiscal years. Early adoption of the
amendments in this Update is permitted, including adoption in any
interim period, (1) for public business entities for reporting
periods for which financial statements have not yet been issued and
(2) for all other entities for reporting periods for which
financial statements have not yet been made available for issuance.
The amendments in this Update should be applied either in the
period of adoption or retrospectively to each period (or periods)
in which the effect of the change in the U.S. federal corporate
income tax rate in the Tax Cuts and Jobs Act is recognized. The
adoption of this guidance by the Company is not expected to have a
material impact on our condensed financial statements and related
disclosures.
Management
believes recently issued accounting pronouncements will have no
impact on the financial statements of the Company.
Accounts
Receivable
Accounts
receivable balances are established for amounts owed to the Company
from its customers from the sale of products. The Company closely
monitors the collectability of outstanding accounts receivable and
provide an allowance for doubtful accounts based on estimated
collections of outstanding amounts. There were $-0- and $428
outstanding accounts receivable as of August 31, 2019 and 2018,
respectively.
Trademark
During the
period ended August 31, 2017, a related party incurred total costs
of $2,800 to acquire five trademarks on behalf of the Company.
Trademark costs are capitalized as incurred to the extent the
Company expects the costs incurred to result in a trademark being
awarded. The trademarks are deemed to have an indefinite life and
are reviewed for impairment loss considerations annually. At August
31, 2019, two of the trademarks for $1,120 were deemed impaired and
were written off in the accompanying statement of operations. As of
August 31, 2019, and 2018, respectively, the Company had trademarks
totaling $1,680 and $2,800, respectively.
RESULTS OF
OPERATIONS
For the Fiscal Years
Ended August 31, 2019 and 2018
For the year ended August
31, 2019, we generated $79,246 in revenues, and the cost of
revenues was $129,337. For the year ended August 31, 2018, we
generated $16,771 in revenues, and the cost of revenues was
$81,025.
For the year ended August
31, 2019, we incurred operating expenses of $617,896, consisting of
advertising expense of $94,443, consulting fees of $69,592, general
and administrative expenses of $163,129, professional fees of
$270,837, stock compensation expense of $18,775, and impairment
expense of $1,120.
For the year ended August
31, 2018, we incurred operating expenses of $371,864, consisting of
advertising expense of $61,812, consulting fees of $72,349, general
and administrative expenses of $103,881, and professional fees of
$133,822.
Expenses increase
approximately 66% from August 31, 2018 to August 31, 2019, which
was due primarily to an increase of an approximately 53% in
advertising expenses, an approximately 53% increase in general and
administrative expenses, and an approximately 102% increase in
professional fees and.
We incurred net losses of
$170,067 and $975,524 for the years ended August 31, 2019 and 2018,
respectively. The following table provides selected financial data
about our company at August 31, 2019 and 2018.
|
Balance Sheet
Data
|
|
August 31,
2019
|
|
|
August 31,
2018
|
|
|
Cash and Cash
Equivalents
|
|
$ |
18,975 |
|
|
$ |
774,468 |
|
|
Total Assets
|
|
$ |
256,414 |
|
|
$ |
862,743 |
|
|
Total Liabilities
|
|
$ |
224,053 |
|
|
$ |
686,868 |
|
|
Shareholders’ Equity
|
|
$ |
32,361 |
|
|
$ |
175,875 |
|
GOING CONCERN
To date the Company only
generated nominal revenues and consequently has incurred recurring
losses from operations. We do not have sufficient funds to support
our daily operations for the next 12 months. The ability of the
Company to continue as a going concern is dependent on raising
capital to fund our business plan and ultimately to attain
profitable operations. Accordingly, these factors raise substantial
doubt as to the Company’s ability to continue as a going
concern.
The Company is attempting to
commence operations and generate sufficient revenue; however, the
Company’s cash position may not be sufficient to support its daily
operations. While the Company believes in the viability of its
strategy to commence operations and generate sufficient revenue and
in its ability to raise additional funds, there can be no
assurances to that effect. The ability of the Company to continue
as a going concern is dependent upon its ability to further
implement its business plan and generate sufficient revenue and its
ability to raise additional funds by way of a public or private
offering.
LIQUIDITY AND CAPITAL
RESOURCES
At August 31, 2019, we had a
cash balance of $18,975, total current liabilities of approximately
$224,053. Such cash amount of $18,975 is not sufficient to continue
our 12-month plan of operation. We will need to raise funds to
continue our 12-month plan of operation and fund our ongoing
operational expenses. Additional funding will likely come from
equity financing from the sale of our common stock. If we are
successful in completing equity financing, existing shareholders
will experience dilution of their interest in our Company. We do
not have any financing arranged and we cannot provide investors
with any assurance that we will be able to raise sufficient funding
from the sale of our common stock to fund our 12-month plan of
operation and ongoing operational expenses. In the absence of such
financing, our business will likely fail. There are no assurances
that we will be able to achieve further sales of our common stock
or any other form of additional financing. If we are unable to
achieve the financing necessary to continue our plan of operations,
then we will not be able to continue our 12-month plan of operation
and our business will fail.
PLAN OF OPERATION
We have only
realized nominal revenues from our business. In the next 12
months, we plan to identify business to whom we can license our
brand name.
OFF-BALANCE SHEET
ARRANGEMENTS
We have no off-balance sheet
arrangements.
As a “smaller reporting
company,” as defined in Rule 12b-2 of the Exchange Act, we are not
required to provide the information called for by this Item.
GRIDIRON BIONUTRIENTS,
INC.
Financial
Statements
August 31, 2019
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of
Directors and Shareholders of Gridiron BioNutrients, Inc.
Opinion on
the Financial Statements
We have audited
the accompanying consolidated balance sheets of Gridiron
BioNutrients, Inc. (“the Company”) as of August 31, 2019 and 2018,
and the related consolidated statements of operations,
stockholders’ equity (deficit), and cash flows for each of the
years in the two-year period ended August 31, 2019, and the related
notes (collectively referred to as the financial statements). In
our opinion, the financial statements present fairly, in all
material respects, the financial position of the Company as of
August 31, 2019 and 2018, and the results of its operations and its
cash flows for each of the years in the two-year period ended
August 31, 2019, respectively, in conformity with accounting
principles generally accepted in the United States of America.
Consideration
of the Company’s Ability to Continue as a Going Concern
The accompanying
financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 3, the
Company has an accumulated deficit and net losses from operations.
These factors raise substantial doubt about the Company’s ability
to continue as a going concern. Management’s plans in regard to
these matters are also described in Note 3. The financial
statements do not include any adjustments that might result from
the outcome of this uncertainty.
Basis for
Opinion
These financial
statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on the Company’s financial
statements based on our audits. We are a public accounting firm
registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with
respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our
audits in accordance with the standards of the PCAOB. Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement, whether due to error or fraud. The
Company is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting. As part of
our audits, we are required to obtain an understanding of internal
control over financial reporting, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting. Accordingly, we express
no such opinion.
Our audits
included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or
fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the
overall presentation of the financial statements. We believe that
our audits provide a reasonable basis for our opinion.
|
Fruci & Associates II, PLLC
We have served as the Company’s auditor
since 2017.
Spokane, Washington
|
|
December 17, 2019
|
|
|
GRIDIRON BIONUTRIENTS, INC.
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
August
31,
2019
|
|
|
August
31,
2018
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash
|
|
$ |
18,975 |
|
|
$ |
774,468 |
|
|
Accounts
receivable
|
|
|
- |
|
|
|
428 |
|
|
Inventory
|
|
|
203,563 |
|
|
|
53,110 |
|
|
Prepaid
expenses
|
|
|
25,611 |
|
|
|
30,000 |
|
|
Total current assets
|
|
|
248,149 |
|
|
|
858,006 |
|
|
|
|
|
|
|
|
|
|
|
|
Other assets
|
|
|
|
|
|
|
|
|
|
Equipment,
net of accumulated depreciation of $2,446 and $529,
respectively
|
|
|
6,585 |
|
|
|
1,937 |
|
|
Trademarks
|
|
|
1,680 |
|
|
|
2,800 |
|
|
Total other assets
|
|
|
8,265 |
|
|
|
4,737 |
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$ |
256,414 |
|
|
$ |
862,743 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued expenses
|
|
$ |
84,428 |
|
|
$ |
95,287 |
|
|
Derivative
liability
|
|
|
39,381 |
|
|
|
537,889 |
|
|
Note payable,
current portion
|
|
|
49,500 |
|
|
|
49,500 |
|
|
Note payable,
convertible net of discount
|
|
|
27,049 |
|
|
|
- |
|
|
Dividends
payable
|
|
|
23,695 |
|
|
|
4,192 |
|
|
Total current liabilities
|
|
|
224,053 |
|
|
|
686,868 |
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
Common stock
subscribed
|
|
|
160,000 |
|
|
|
160,000 |
|
|
Preferred
stock, $0.001 par value; 25,000,000 shares authorized;
|
|
|
|
|
|
|
|
|
|
8,480,000 and
8,480,000 issued and outstanding as of
|
|
|
|
|
|
|
|
|
|
August 31,
2019 and August 31, 2018, respectively
|
|
|
8,480 |
|
|
|
8,480 |
|
|
Common stock,
$0.001 par value; 200,000,000 shares authorized;
|
|
|
|
|
|
|
|
|
|
135,280,651
and 132,637,500 shares issued and outstanding as of
|
|
|
|
|
|
|
|
|
|
August 31,
2019 and August 31, 2018, respectively
|
|
|
135,281 |
|
|
|
132,638 |
|
|
Additional
paid in capital
|
|
|
942,159 |
|
|
|
867,949 |
|
|
Accumulated
deficit
|
|
|
(1,213,559 |
) |
|
|
(993,192 |
) |
|
Total stockholders' equity
|
|
|
32,361 |
|
|
|
175,875 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and
Stockholders' equity
|
|
$ |
256,414 |
|
|
$ |
862,743 |
|
The accompanying
notes are an integral part of these financial statements.
|
GRIDIRON BIONUTRIENTS, INC.
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
For the Years
Ended
|
|
|
|
|
August
31,
2019
|
|
|
August
31,
2018
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$ |
79,246 |
|
|
$
|
16,771 |
|
|
Cost of Revenue
|
|
|
129,337 |
|
|
|
81,025 |
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
(50,091 |
) |
|
|
(64,254 |
) |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Advertising
|
|
|
94,443 |
|
|
|
61,812 |
|
|
Consulting
fees
|
|
|
69,592 |
|
|
|
72,349 |
|
|
General and
administrative
|
|
|
163,129 |
|
|
|
103,881 |
|
|
Professional
fees
|
|
|
270,837 |
|
|
|
133,822 |
|
|
Stock
compensation expense
|
|
|
18,775 |
|
|
|
- |
|
|
Impairment
Expense
|
|
|
1,120 |
|
|
|
- |
|
|
Total operating expenses
|
|
|
617,896 |
|
|
|
371,864 |
|
|
|
|
|
|
|
|
|
|
|
|
Net operating income (loss)
|
|
|
(667,987 |
) |
|
|
(436,118 |
) |
|
|
|
|
|
|
|
|
|
|
|
Other (income) expense:
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
587 |
|
|
|
1,517 |
|
|
Gain on
change in fair value of derivative liability for preferred warrants
and convertible note
|
|
|
(521,784 |
) |
|
|
(136,123 |
) |
|
Debt/Equity
issuance costs
|
|
|
23,277 |
|
|
|
674,012 |
|
|
Total Other
income (expense)
|
|
|
(497,920 |
) |
|
|
539,406 |
|
|
|
|
|
|
|
|
|
|
|
|
Loss before provision for
taxes
|
|
|
(170,067 |
) |
|
|
(975,524 |
) |
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$ |
(170,067 |
) |
|
$ |
(975,524 |
) |
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted income (loss)
per share
|
|
$ |
(0.00 |
) |
|
$ |
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding - basic and diluted
|
|
|
134,300,278 |
|
|
|
125,158,048 |
|
The accompanying
notes are an integral part of these financial statements.
|
GRIDIRON BIONUTRIENTS, INC.
|
|
CONSOLIDATED
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred
Stock
|
|
|
Common
Stock
|
|
|
Additional
Paid-In
|
|
|
Common
Stock to
be
|
|
|
Accumulated
|
|
|
Total
Stockholders'
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Issued
|
|
|
Deficit
|
|
|
Equity
|
|
|
Balance at August 31, 2017
|
|
|
- |
|
|
$ |
- |
|
|
|
62,637,500 |
|
|
$ |
62,638 |
|
|
$ |
(62,438 |
) |
|
$ |
- |
|
|
$ |
(13,476 |
) |
|
$ |
(13,276 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common
stock for reverse merger
|
|
|
- |
|
|
|
- |
|
|
|
70,000,000 |
|
|
|
70,000 |
|
|
|
(143,040 |
) |
|
|
- |
|
|
|
|
|
|
|
(73,040 |
) |
|
Common stock
subscribed for cash
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
160,000 |
|
|
|
|
|
|
|
160,000 |
|
|
Forgiveness of
related party payable
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
75,907 |
|
|
|
- |
|
|
|
|
|
|
|
75,907 |
|
|
Issuance of
preferred stock for cash
|
|
|
8,480,000 |
|
|
|
8,480 |
|
|
|
- |
|
|
|
- |
|
|
|
997,520 |
|
|
|
- |
|
|
|
|
|
|
|
1,006,000 |
|
|
Dividends on
preferred stock accrued
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(4,192 |
) |
|
|
(4,192 |
) |
|
Net loss, period
ended August 31, 2018
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(975,524 |
) |
|
|
(975,524 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at August 31, 2018
|
|
|
8,480,000 |
|
|
$ |
8,480 |
|
|
|
132,637,500 |
|
|
$ |
132,638 |
|
|
$ |
867,949 |
|
|
$ |
160,000 |
|
|
$ |
(993,192 |
) |
|
$ |
175,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends on
preferred stock accrued
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(50,300 |
) |
|
|
(50,300 |
) |
|
Stock compensation
issued
|
|
|
- |
|
|
|
- |
|
|
|
450,000 |
|
|
|
450 |
|
|
|
18,325 |
|
|
|
- |
|
|
|
- |
|
|
|
18,775 |
|
|
Conversion of stock
from dividends payable
|
|
|
- |
|
|
|
- |
|
|
|
2,193,151 |
|
|
|
2,193 |
|
|
|
55,885 |
|
|
|
- |
|
|
|
- |
|
|
|
58,078 |
|
|
Net loss, period
ended August 31, 2019
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(170,067 |
) |
|
|
(170,067 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at August 31, 2019
|
|
|
8,480,000 |
|
|
$ |
8,480 |
|
|
|
135,280,651 |
|
|
$ |
135,281 |
|
|
$ |
942,159 |
|
|
$ |
160,000 |
|
|
$ |
(1,213,559 |
) |
|
$ |
32,361 |
|
The accompanying
notes are an integral part of these financial statements.
|
GRIDIRON BIONUTRIENTS, INC.
|
|
Statements of
Cash Flow
|
|
|
|
|
|
|
|
|
|
|
|
For the Years Ended
|
|
|
|
|
August
31,
2019
|
|
|
August
31,
2018
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities:
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$ |
(170,067 |
) |
|
$ |
(975,524 |
) |
|
Adjustments to reconcile net
loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
1,916 |
|
|
|
530 |
|
|
Debt/stock
based issue costs
|
|
|
23,276 |
|
|
|
674,012 |
|
|
Gain on change in fair value of derivative liability
|
|
|
(521,784 |
) |
|
|
(136,123 |
) |
|
Penalties assessed on unpaid dividends
|
|
|
27,281 |
|
|
|
- |
|
|
Stock based
compensation
|
|
|
18,775 |
|
|
|
- |
|
|
Debt discount
interest
|
|
|
49 |
|
|
|
- |
|
|
Impairment
expense
|
|
|
1,120 |
|
|
|
- |
|
|
Changes in
operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
428 |
|
|
|
(428 |
) |
|
Inventory
|
|
|
(150,453 |
) |
|
|
(53,110 |
) |
|
Prepaid
expenses
|
|
|
4,389 |
|
|
|
(30,000 |
) |
|
Accounts
payable and accrued expenses
|
|
|
(10,859 |
) |
|
|
94,182 |
|
|
Related party
payable
|
|
|
- |
|
|
|
(16,101 |
) |
|
Net cash used in operating
activities
|
|
|
(775,929 |
) |
|
|
(442,562 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
|
|
|
|
|
Purchase of
equipment
|
|
|
(6,564 |
) |
|
|
(2,467 |
) |
|
Net cash used in investing
activities
|
|
|
(6,564 |
) |
|
|
(2,467 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
|
|
|
|
Proceeds from
notes payable
|
|
|
- |
|
|
|
49,500 |
|
|
Proceeds from
convertible notes payable
|
|
|
27,000 |
|
|
|
- |
|
|
Proceeds from
common stock subscriptions
|
|
|
- |
|
|
|
160,000 |
|
|
Proceeds from
the sale of preferred stock and warrants
|
|
|
- |
|
|
|
1,006,000 |
|
|
Cash
contributed in merger
|
|
|
- |
|
|
|
3,972 |
|
|
Net cash provided by financing
activities
|
|
|
27,000 |
|
|
|
1,219,472 |
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in
cash
|
|
|
(755,493 |
) |
|
|
774,443 |
|
|
Cash - beginning of the year
|
|
|
774,468 |
|
|
|
25 |
|
|
Cash - end of the year
|
|
$ |
18,975 |
|
|
$ |
774,468 |
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures:
|
|
|
|
|
|
|
|
|
|
Interest
paid
|
|
$ |
- |
|
|
$ |
- |
|
|
Income
taxes
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash transactions:
|
|
|
|
|
|
|
|
|
|
Preferred stock dividends
declared
|
|
$
|
50,300
|
|
|
$
|
4,192
|
|
|
Discount on convertible
note payable
|
|
$
|
3,000
|
|
|
$
|
-
|
|
|
Accounts
payable and accrued expenses assumed in reverse merger
|
|
$ |
- |
|
|
$ |
1,105 |
|
|
Forgiveness
of related party payable
|
|
$ |
- |
|
|
$ |
75,907 |
|
|
Common shares
issued in reverse merger at par value
|
|
$ |
- |
|
|
$ |
75,907 |
|
|
Trademark
costs paid by related party
|
|
$ |
- |
|
|
$ |
70,000 |
|
The accompanying notes are an
integral part of these financial statements.
GRIDIRON BIONUTRIENTS, INC.
Notes to Consolidated
Financial Statements
August 31, 2019
NOTE 1 – ORGANIZATION AND
DESCRIPTION OF BUSINESS
Gridiron BioNutrients, Inc.
(the “Company” or “Gridiron”) was formed under the laws of the
state of Nevada on July 20, 2017 to develop and distribute a retail
line of health water infused with probiotics and minerals. The
Company has elected an August 31st year end.
Acquisition and
Reverse Merger
On October 10, 2017, the
Company completed a reverse merger with My Cloudz, Inc. (“My
Cloudz”) pursuant to which the Company merged into My Cloudz on
October 10, 2017. Under the terms of the merger, the Company
shareholders received 70,000,000 common shares of My Cloudz common
stock such that the Company shareholders received approximately 57%
of the total common shares issued and outstanding following the
merger. Due to the nominal assets and limited operations of My
Cloudz prior to the merger, the transaction was accorded reverse
recapitalization accounting treatment under the provision of
Financial Accounting Standards Board Accounting Standards
Codification (“FASB ASC”) 805 whereby the Company became the
accounting acquirer (legal acquiree) and My Cloudz was treated as
the accounting acquiree (legal acquirer). The historical financial
records of the Company are those of the accounting acquirer
(GridIron) adjusted to reflect the legal capital of the accounting
acquiree (My Cloudz). As the transaction was treated as a
recapitalization, no intangibles, including goodwill, were
recognized. Concurrent with the effective date of the reverse
recapitalization transaction, the Company adopted the fiscal year
end of the accounting acquirer of August 31.
At the date of acquisition,
My Cloudz had $3,972 of cash, $1,105 of accounts payable and a
related party payable of $75,907. Book values for all assets
acquired and liabilities assumed equaled fair values as of the date
of acquisition.
NOTE 2 – SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
Basis of
Presentation
This summary of accounting
policies for Gridiron is presented to assist in understanding the
Company’s financial statements. The Company uses the accrual basis
of accounting and accounting principles generally accepted in the
United States of America (“GAAP” accounting) and have been
consistently applied in the preparation of the financial
statements.
Use of Estimates
The preparation of financial
statements in conformity with accounting principles generally
accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as
of the date of the financial statements. Actual results could
differ from those estimates. Estimates are used when accounting for
fair value calculations related to embedded conversion features of
outstanding convertible notes payable.
Cash
For purposes of the
statement of cash flows, the Company considers all highly liquid
debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held
for investment purposes. The Company had $18,975 and $774,468 of
cash and cash equivalents as of August 31, 2019 and 2018. As of
August 31, 2018, the Company held cash of $524,468 with one
financial institution in excess of the FDIC insured limit of
$250,000.
Revenue
recognition
The Company recognizes
revenue under ASU No. 2014-09, “Revenue from Contracts
with Customers (Topic 606),” (“ASC
606”). The core principle of the revenue standard
is that a company should recognize revenue to depict the transfer
of promised goods or services to customers in an amount that
reflects the consideration to which the company expects to be
entitled in exchange for those goods or services. The Company only
applies the five-step model to contracts when it is probable that
the Company will collect the consideration it is entitled to in
exchange for the goods and services transferred to the
customer.
Revenue is
recognized when a customer obtains control of promised goods or
services and is recognized in an amount that reflects the
consideration that an entity expects to receive in exchange for
those goods or services. In addition, the standard requires
disclosure of the nature, amount, timing, and uncertainty of
revenue and cash flows arising from contracts with customers. The
amount of revenue that is recorded reflects the consideration that
the Company expects to receive in exchange for those goods. The
Company applies the following five-step model in order to determine
this amount: (i) identification of the promised goods in the
contract; (ii) determination of whether the promised goods are
performance obligations, including whether they are distinct in the
context of the contract; (iii) measurement of the transaction
price, including the constraint on variable consideration; (iv)
allocation of the transaction price to the performance obligations;
and (v) recognition of revenue when (or as) the Company satisfies
each performance obligation.
The Company only applies the five-step model to contracts
when it is probable that the entity will collect the consideration
it is entitled to in exchange for the goods transfers to the
customer. Once a contract is determined to be within the scope of
ASC 606 at contract inception, the Company reviews the contract to
determine which performance obligations the Company must deliver
and which of these performance obligations are distinct. The
Company recognizes as revenues the amount of the transaction price
that is allocated to the respective performance obligation when the
performance obligation is satisfied or as it is satisfied.
Generally, the Company’s performance obligations are transferred to
customers at a point in time, typically upon delivery.
Fair Value of Financial
Instruments
Fair value of certain of the
Company’s financial instruments including cash, prepaid expenses,
accounts payable, accrued expenses, notes payable, and other
accrued liabilities approximate cost because of their short
maturities. The Company measures and reports fair value in
accordance with ASC 820, “Fair Value Measurements and Disclosure”
defines fair value, establishes a framework for measuring fair
value in accordance with generally accepted accounting principles
and expands disclosures about fair value investments.
Fair value, as defined in
ASC 820, is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value of an
asset should reflect its highest and best use by market
participants, principal (or most advantageous) markets, and an
in-use or an in-exchange valuation premise. The fair value of a
liability should reflect the risk of nonperformance, which
includes, among other things, the Company’s credit risk.
Valuation techniques are
generally classified into three categories: the market approach;
the income approach; and the cost approach. The selection and
application of one or more of the techniques may require
significant judgment and are primarily dependent upon the
characteristics of the asset or liability, and the quality and
availability of inputs. Valuation techniques used to measure fair
value under ASC 820 must maximize the use of observable inputs and
minimize the use of unobservable inputs. ASC 820 also provides fair
value hierarchy for inputs and resulting measurement as
follows:
Level 1: Quoted prices
(unadjusted) in active markets that are accessible at the
measurement date for identical assets or liabilities.
Level 2: Quoted prices for
similar assets or liabilities in active markets; quoted prices for
identical or similar assets or liabilities in markets that are not
active; inputs other than quoted prices that are observable for the
asset or liability; and inputs that are derived principally from or
corroborated by observable market data for substantially the full
term of the assets or liabilities; and
Level 3: Unobservable inputs
for the asset or liability that are supported by little or no
market activity, and that are significant to the fair values.
Fair value measurements are
required to be disclosed by the Level within the fair value
hierarchy in which the fair value measurements in their entirety
fall. Fair value measurements using significant unobservable inputs
(in Level 3 measurements) are subject to expanded disclosure
requirements including a reconciliation of the beginning and ending
balances, separately presenting changes during the period
attributable to the following: (i) total gains or losses for the
period (realized and unrealized), segregating those gains or losses
included in earnings, and a description of where those gains or
losses included in earning are reported in the statement of
income.
As discussed in Note 9 –
Derivative Liability, the Company valued its derivative
liability using Level 3 inputs as of August 31, 2019 and August 31,
2018. The Company did not identify any additional assets or
liabilities that are required to be presented on the balance sheet
at fair value in accordance with ASC 825-10 as of August 31, 2019
and 2018.
Derivative Liabilities
The Company generally does not use
derivative financial instruments to hedge exposures to cash flow or
market risks. However, certain other financial instruments, such as
warrants and embedded conversion features on the convertible debt,
are classified as derivative liabilities due to protection
provisions within the agreements. Convertible notes
payable are initially recorded at fair value using the Monte
Carlo model and subsequently adjusted to fair value at the close of
each reporting period. The preferred stock warrants are initially
recorded at fair value using the Black Scholes model and
subsequently adjusted to fair value at the close of each reporting
period. The Company accounts for derivative instruments and debt
instruments in accordance with the interpretive guidance of ASC
815, ASU 2017-11, and associated pronouncements related to the
classification and measurement of warrants and instruments with
conversion features.
Income Taxes
Income taxes are accounted
for under the assets and liability method. Deferred tax assets and
liabilities are recognized for the estimated future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss and tax credit carry
forwards. Deferred tax assets and liabilities are measured using
enacted tax rates in effect for the year in which those temporary
differences are expected to be recovered or settled. Use of net
operating loss carry forwards for income tax purposes may be
limited by Internal Revenue Code section 382 if a change of
ownership occurs.
Principals of
Consolidation
The consolidated financial statements
represent the results of Gridiron BioNutrients, Inc, its wholly
owned subsidiary, Gridiron Ventures and the assets, processes, and
results therefrom. All intercompany transactions and balances have
been eliminated. All financial information has been prepared in
conformity with accounting principles generally accepted in the
United States of America.
Property and
Equipment
Property and equipment are
carried at cost. Expenditures for maintenance and repairs are
expensed in the period incurred. Renewals and betterments that
materially extend the life of the assets are capitalized. When
assets are retired or otherwise disposed of, the cost and related
accumulated depreciation are removed from the accounts, and any
resulting gain or loss is reflected in income for the period.
Depreciation is computed for
financial statement purposes on a straight-line basis over
estimated useful lives of the related assets and the modified
accelerated cost recovery system for federal income tax purposes.
The estimated useful lives of depreciable assets are:
|
|
Estimated Useful
Lives
|
|
Computer and other
equipment
|
|
3 years
|
|
Vehicle
|
|
5 years
|
The Company’s property and
equipment consisted of the following as of August 31, 2019 and
2018:
|
|
|
August 31,
2019
|
|
|
August 31,
2018
|
|
|
Computer Equipment
|
|
$ |
2,467 |
|
|
$ |
2,466 |
|
|
Vehicle
|
|
|
2,977 |
|
|
|
- |
|
|
Other
|
|
|
3,587 |
|
|
|
- |
|
|
Accumulated depreciation
|
|
|
(2,446 |
) |
|
|
(529 |
) |
|
Net book value
|
|
$ |
6,585 |
|
|
$ |
1,937 |
|
Depreciation expense for the
years ended August 31, 2019 and 2018 was $1,916 and $530,
respectively.
Inventories
Inventories consist of raw
materials, packing materials, bottled water and concentrates,
capsules, gummy products, drops and other items and are stated at
the lower of cost or net realizable value using the first‑in,
first‑out method. The Company periodically assesses the
recoverability of its inventory and reduces the carrying value of
the inventory when items are determined to be obsolete, defective
or in excess of forecasted sales requirements. Inventory
write‑downs for excess, defective and obsolete inventory are
recorded as a cost of revenue. During August 2019, the Company
wrote-off $40,136 of expired inventory, The Company did not have
any other write downs of inventory during the years ended August
31, 2019 and 2018. Inventory balances were $203,563 and $53,110 as
of August 31, 2019 and 2018, respectively.
A summary of the Company’s
inventory as of August 31, 2019 and 2018 is as follows:
|
Type
|
|
August 31,
2019
|
|
|
August 31,
2018
|
|
|
Raw Materials
|
|
$ |
19,477 |
|
|
$ |
33,010 |
|
|
Packaging Materials
|
|
|
6,558 |
|
|
|
1,860 |
|
|
Gridrion Water &
Concentrates
|
|
|
126,773 |
|
|
|
10,566 |
|
|
Gridiron Capsules
|
|
|
32,044 |
|
|
|
1,233 |
|
|
Gummy and Other Products
|
|
|
18,710 |
|
|
|
6,440 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Inventory
|
|
$ |
203,563 |
|
|
$ |
53,110 |
|
Basic Income (Loss) Per
Share
Basic income (loss) per
share is calculated by dividing the Company’s net loss applicable
to common shareholders by the weighted average number of common
shares during the period. Diluted earnings per share is calculated
by dividing the Company’s net income available to common
shareholders by the diluted weighted average number of shares
outstanding during the year. The diluted weighted average number of
shares outstanding is the basic weighted number of shares adjusted
for any potentially dilutive debt or equity. The conversion of
preferred shares, warrants and convertible debt to common shares
could potentially bring the number of common shares to a total of
approximately 194,000,000. The preferred conversion and warrants
would account for approximately 51,394,000 additional shares, the
convertible debt would account for approximately 7,096,900
additions shares and an additional 228,571 that have not been
issued yet, along with the 135,280,651 outstanding at August 31,
2019. The Company's convertible notes and warrants are excluded
from the computation of diluted earnings per share as they are
anti-dilutive due to the Company's losses for the years ended
August 31, 2019 and 2018.
Dividends
As discussed in Note 5 –
Stockholders Equity (Deficit), during the year ended August 31,
2018, the Company issued preferred stock which accrues dividends at
a rate of 5% annually. There was $23,695 and $4,192 of dividends
payable at August 31, 2019 and August 31, 2018, respectively. The
dividends have not been declared and are accrued in the
accompanying consolidated balance sheets as a result of a
contractual obligation in the Company’s preferred stock
offering.
Advertising Costs
The Company’s policy
regarding advertising is to expense advertising when incurred. The
Company incurred advertising costs totaling $94,443 and $61,812
during the years ended August 31, 2019 and 2018, respectively.
Stock-Based
Compensation
The Company accounts for
share-based compensation in accordance with the fair value
recognition provisions of the Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification (“ASC”) No. 718 and No.
505. After December 15, 2018, the scope of Topic 718,
Compensation—Stock Compensation, was expanded to include
share-based payments issued to nonemployees for goods and services.
The Company issues restricted stock to employees and consultants
for their services. Cost for these transactions are measured at the
fair value of the equity instruments issued at the date of grant.
These shares are considered fully vested and the fair market value
is recognized as expense in the period granted. The Company
recognized consulting expenses and a corresponding increase to
additional paid-in-capital related to stock issued for services.
For agreements requiring future services, the consulting expense is
to be recognized ratably over the requisite service
period.
There was $18,775 and $-0- of
stock-based compensation during the years ended August 31, 2019 and
2018, respectively.
Related Parties
The registrant follows
subtopic 850-10 of the FASB Accounting Standards Codification for
the identification of related parties and disclosure of related
party transactions.
Pursuant to Section
850-10-20 the Related parties include (a) affiliates of the
registrant; (b) entities for which investments in their equity
securities would be required, absent the election of the fair value
option under the Fair Value Option Subsection of Section 825–10–15,
to be accounted for by the equity method by the investing entity;
(c) trusts for the benefit of employees, such as pension and
profit-sharing trusts that are managed by or under the trusteeship
of management; (d) principal owners of the registrant; (e)
management of the registrant; (f) other parties with which the
registrant may deal if one party controls or can significantly
influence the management or operating policies of the other to an
extent that one of the transacting parties might be prevented from
fully pursuing its own separate interests; and (g) Other parties
that can significantly influence the management or operating
policies of the transacting parties or that have an ownership
interest in one of the transacting parties and can significantly
influence the other to an extent that one or more of the
transacting parties might be prevented from fully pursuing its own
separate interests.
The financial statements
shall include disclosures of material related party transactions,
other than compensation arrangements, expense allowances, and other
similar items in the ordinary course of business. However,
disclosure of transactions that are eliminated in the preparation
of consolidated or combined financial statements is not required in
those statements. The disclosures shall include: (a) the nature of
the relationship(s) involved; (b) description of the transactions,
including transactions to which no amounts or nominal amounts were
ascribed, for each of the periods for which income statements are
presented, and such other information deemed necessary to an
understanding of the effects of the transactions on the financial
statements; (c) the dollar amounts of transactions for each of the
periods for which income statements are presented and the effects
of any change in the method of establishing the terms from that
used in the preceding period; and (d) amounts due from or to
related parties as of the date of each balance sheet presented and,
if not otherwise apparent, the terms and manner of settlement.
Recently Issued
Accounting Standards
In August 2018, the SEC
adopted the final rule under SEC Release No. 33-10532,
”Disclosure Update and Simplification,” amending certain
disclosure requirements that were redundant, duplicative,
overlapping, outdated or superseded. In addition, the amendments
expanded the disclosure requirements on the analysis of
stockholders’ equity for interim financial statements. Under the
amendments, an analysis of changes in each caption of stockholders’
equity presented in the balance sheet must be provided in a note or
separate statement. This analysis should present a reconciliation
of the beginning balance to the ending balance of each period for
which a statement of comprehensive income is required to be filed.
This final rule was effective as of November 5, 2018. The adoption
of this final rule did not have a material impact on the financial
statements.
In June 2018, the FASB
issued ASU 2018-07, ”Compensation – Stock Compensation (Topic
718): Improvements to Nonemployee Share-Based Payment
Accounting,” which expands the scope of Topic 718 to include
all share-based payment transactions for acquiring goods and
services from non-employees. This pronouncement is effective for
fiscal years, and for interim periods within those fiscal years,
beginning after December 15, 2018, with early adoption permitted.
The Company elected to early-adopt this standard in the current
period; the adoption of this standard did not impact the financial
statements.
In November 2016, the FASB
issued ASU 2016-18, ”Statement of Cash Flows (Topic 230):
Restricted Cash,” which provides amendments to current guidance
to address the classifications and presentation of changes in
restricted cash in the statement of cash flows. The effective date
for the standard is for fiscal years beginning after December 15,
2017. The Company adopted the standard effective September 1,
2018; the adoption of this standard did not have a material impact
on the financial statements.
In October 2016, the FASB
issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity
Transfers of Assets Other Than Inventory.” The amendments in
this update will require recognition of current and deferred income
taxes resulting from an intra-entity transfer of an asset other
than inventory when the transfer occurs. This update is effective
for annual and interim periods beginning after December 15, 2017.
The Company adopted the standard effective September 1, 2018;
the adoption of this standard did not have a material impact on the
financial statements.
In June 2016, the FASB
issued ASU 2016-13, ”Financial Instruments – Credit Losses
(Topic 326)” which introduces new guidance for the accounting
for credit losses on instruments within its scope. The new guidance
introduces an approach based on expected losses to estimate credit
losses on certain types of financial instruments. For trade
receivables, the Company will be required to use a forward-looking
expected loss model rather than the incurred loss model for
recognizing credit losses which reflects losses that are probable.
Credit losses relating to available-for-sale debt securities will
also be recorded through an allowance for credit losses rather than
as a reduction in the amortized cost basis of the securities. The
guidance is effective for fiscal years beginning after December 31,
2019, including interim periods within those years. Early
application of the guidance is permitted for all entities for
fiscal years beginning after December 15, 2018, including the
interim periods within those fiscal years. Application of the
amendments is through a cumulative-effect adjustment to retained
earnings as of the effective date. The Company does not expect the
adoption of this final rule to have a material impact on the
financial statements.
In February 2016, the FASB
issued ASU 2016-02, “Leases (Topic 842),” which
supersedes the guidance in ASC 840, ”Leases.” The purpose of
the new standard is to improve transparency and comparability
related to the accounting and reporting of leasing arrangements.
The guidance will require balance sheet recognition for assets and
liabilities associated with rights and obligations created by
leases with terms greater than twelve months. The guidance is
effective for fiscal years beginning after December 15, 2018,
including interim periods within those years. Although the standard
initially required the modified retrospective approach for
adoption, in July 2018, the FASB issued ASU 2018-18, allowing
companies to initially apply the new lease requirements at the
effective date and recognize a cumulative-effect adjustment to the
opening balance of retained earnings in the period of adoption.
Early adoption is permitted. The Company does not expect the
adoption of this final rule to have a material impact on the
financial statements.
In February 2018, the Financial Accounting
Standards Board (FASB) issued Accounting Standards Update (ASU)
2018-02, Income Statement Reporting, Comprehensive Income (Topic
220). Effective for all entities for fiscal years beginning after
December 15, 2018, and interim periods within those fiscal years.
Early adoption of the amendments in this Update is permitted,
including adoption in any interim period, (1) for public business
entities for reporting periods for which financial statements have
not yet been issued and (2) for all other entities for reporting
periods for which financial statements have not yet been made
available for issuance. The amendments in this Update should be
applied either in the period of adoption or retrospectively to each
period (or periods) in which the effect of the change in the U.S.
federal corporate income tax rate in the Tax Cuts and Jobs Act is
recognized. The adoption of this guidance by the Company is not
expected to have a material impact on our condensed financial
statements and related disclosures.
Management believes recently issued
accounting pronouncements will have no impact on the financial
statements of the Company.
Accounts
Receivable
Accounts receivable balances
are established for amounts owed to the Company from its customers
from the sale of products. The Company closely monitors the
collectability of outstanding accounts receivable and provide an
allowance for doubtful accounts based on estimated collections of
outstanding amounts. There were $-0- and $428 outstanding accounts
receivable as of August 31, 2019 and 2018, respectively.
Trademark
During the period ended
August 31, 2017, a related party incurred total costs of $2,800 to
acquire five trademarks on behalf of the Company. Trademark costs
are capitalized as incurred to the extent the Company expects the
costs incurred to result in a trademark being awarded. The
trademarks are deemed to have an indefinite life and are reviewed
for impairment loss considerations annually. At August 31, 2019,
two of the trademarks for $1,120 were deemed impaired and were
written off in the accompanying statement of operations. As of
August 31, 2019, and 2018, respectively, the Company had trademarks
totaling $1,680 and $2,800, respectively.
NOTE 3 – GOING
CONCERN
The Company’s financial
statements have been prepared on a going concern basis, which
contemplates the realization of assets and satisfaction of
liabilities in the normal course of business. The Company had a net
loss of $170,067 for the year ended August 31, 2019. The Company
has working capital deficit of $24,096 and an accumulated deficit
of $1,213,559 as of August 31, 2019. These conditions raise
substantial doubt about the Company’s ability to continue as a
going concern. The consolidated financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.
The ability of the Company
to fully commence its operations is dependent upon, among other
things, obtaining additional financing to continue operations, and
execution of its business plan. In response to these concerns,
management plans to fund operations through additional debt and
equity financing. Debt instruments may be convertible or
non-convertible and will vary based on the Company’s needs and
financing options available at such times. There can be no
assurance that management’s plan will be successful.
NOTE 4 – NOTES
PAYABLES
Short-Term Notes Payable
As of August 31, 2019, and 2018, the Company
had two notes payable with a principal balance of $49,500, owed to
two separate noteholders. Each note payable is unsecured with one
bearing interest at 5% and the other at 0% respectively. The
Company had an outstanding accrued interest balance of $1,014 and
$475 as of August 31, 2019 and 2018, respectively, which has been
included in the consolidated balance sheets under accounts payable
and accrued expenses.
Convertible Notes Payable
On August 27, 2019, the
Company signed a convertible promissory note with an investor. The
$30,000 note was issued with an original issue discount of $3,000
and bears interest at 10% per year. The note principal and interest
are convertible into shares of common stock at a 25% discount to
the lowest traded price of the Company’s common stock during the 10
prior trading days including the day the notice of conversion is
received by the Company. The note matures on February 27, 2020. The
note has a prepayment penalty of 110% of the principal and interest
outstanding if repaid before 180 days from issuance. After February
27, 2020, the payment premium increases to 125% of the principal
and interest outstanding and if in default, the payment premium
increases to 140% of the principal and interest outstanding. The
original issue discount is amortized through the term of the note.
The unpaid balance including accrued interest was $30,033 at August
31, 2019. At August 31, 2019, the outstanding principle balances,
net of original issue debt discount of $2,951 was $27,049.
The conversion features meets the definition
of a derivative liability instrument because the conversion rate is
variable and therefore does not meet the “fixed-for-fixed” criteria
outlined in ASC 815-40-15. As a result, the conversion features of
the notes are recorded as a derivative liability at fair value and
marked-to-market each period with the changes in fair value each
period charged or credited to other income (expense). See
Note 9 - Derivative Liability, for a
further discussion.
The Company recorded interest expense on the
original issue debt discount of $49 for the year ended August 31,
2019, in the accompanying consolidated statements of
operations.
NOTE 5 – RELATED PARTY
TRANSACTIONS
As at August 31, 2019 and 2018,
the Company owed $38,449 and -0-, respectively to its President and
Director. The balance due is recorded in accounts payable in the
accompanying consolidated balance sheets.
NOTE 6 – STOCKHOLDERS’
EQUITY
Preferred Stock
On July 16, 2018, the Board
of Directors and one (1) stockholder adopted and approved a
resolution to affect an amendment to our Articles of Incorporation
to authorize the creation of 5,000,000 shares, designated as our
Preferred Stock. On July 16, 2018, the Company filed a Certificate
of Amendment to its Articles of Incorporation creating 5,000,000
shares of preferred stock.
On July 30, 2018, the Board
of Directors of the Company authorized the designation of 9,000,000
shares of Series A Preferred Stock. On July 31, 2018, the Company
filed a Certificate of Designation with the Secretary of State of
the State of Nevada, creating 9,000,000 shares of Series A
Preferred Stock.
On August 1, 2018, the Board
of Directors and one (1) stockholder adopted and approved a
resolution to affect an amendment to our Articles of Incorporation
to authorize the creation of 25,000,000 shares, designated as our
Preferred Stock. On August 1, 2018, the Company filed a Certificate
of Amendment to its Articles of Incorporation creating 25,000,000
shares of preferred stock.
The preferred stock accrues
dividends at a rate of 5% annually, are convertible to common stock
at a rate of $0.125 per share at the option of the holder. Further,
the preferred stock is redeemable by the Company at a premium
during the first 180 days after issuance and another premium after
the 180th day from issuance.
During the year ended August
31, 2018, the Company issued a total of 8,480,000 of preferred
stock and 8,480,000 of warrants for total cash proceeds of
$1,006,000.
There were 8,480,000
preferred shares issued and outstanding as of August 31, 2019 and
2018.
Common Stock
The Company is authorized to
issue up to 200,000,000 shares of $0.001 par value common
stock.
During the year ended August
31, 2018, the Company issued a total of 70,000,000 restricted
shares of the Company’s common stock to complete its acquisition
and reverse merger as discussed in Note 1 – Organization and
Description of Business.
On January 30, 2019, the
Company entered into a consulting agreement whereby it issued a
total of 100,000 restricted shares of the Company’s common stock in
exchange for advisory services. The shares were issued on April 5,
2019 and valued at $.0321 per share or $3,210.
On February 7, 2019, the
Company entered into a consulting agreement whereby it issued a
total of 125,000 restricted shares of the Company’s common stock in
exchange for business development services. The shares were issued
on April 5, 2019 and valued at $.0458 per share or $5,725.
On February 7, 2019, the
Company entered into a consulting agreement whereby it issued a
total of 75,000 restricted shares of the Company’s common stock in
exchange for business development services. The shares were issued
on April 5, 2019 and valued at $.0458 per share or $3,435.
On February 14, 2019, the
Company converted accrued interest and preferred dividends penalty
totaling $15,370 or $.0337 into 467,043 restricted shares of
Company’s common stock.
On February 27, 2019, the
Company converted accrued interest and preferred dividends penalty
totaling $8,884 or $.0294 into 302,586 restricted shares of
Company’s common stock.
On March 1, 2019, the
Company converted accrued interest and preferred dividends penalty
totaling $14,470 or $.0294 into 493,001 restricted shares of
Company’s common stock.
On March 11, 2019, the
Company converted accrued interest and preferred dividends penalty
totaling $19,355 or $.0208 into 930,521 restricted shares of
Company’s common stock.
On March 11, 2019, the
Company entered into a consulting agreement whereby it issued a
total of 150,000 restricted shares of the Company’s common stock in
exchange for advisory services. The shares were issued on April 5,
2019 and valued at $.0427 per share or $6,405.
There were 135,280,651 and
132,637,500 common shares issued and outstanding as of August 31,
2019 and 2018, respectively.
Common Stock
Subscribed
During the year ended August
31, 2018, the Company accepted four separate common stock
subscriptions representing a total of 228,571 common shares for
total cash proceeds of $160,000. As of August 31, 2019, the shares
have not been issued to the investor.
NOTE 7 – INCOME
TAXES
The Company’s policy is to
provide for deferred income taxes based on the difference between
the financial statement and tax bases of assets and liabilities
using enacted tax rates that will be in effect when the differences
are expected to reverse. The U.S. Tax Cuts and Jobs Act (TCJA)
legislation reduces the U.S. federal corporate income tax rate from
35.0% to 21.0% and is effective June 22, 2018 for the Company. We
did not provide any current or deferred U.S. federal income tax
provision or benefit for any of the periods presented because we
have experienced operating losses since inception. When it is more
likely than not that a tax asset cannot be realized through future
income the Company must allow for this future tax benefit. We
provided a full valuation allowance on the net deferred tax asset,
consisting of net operating loss carryforwards, because management
has determined that it is more likely than not that we will not
earn income sufficient to realize the deferred tax assets during
the carryforward period.
The Company is not aware of
any uncertain tax position that, if challenged, would have a
material effect on the financial statements for the year ended
August 31, 2019 or during the prior three years applicable under
FASB ASC 740. We did not recognize any adjustment to the liability
for uncertain tax position and therefore did not record any
adjustment to the beginning balance of accumulated deficit on the
consolidated balance sheet. All tax returns for the Company remain
open for examination.
The provision for income
taxes differs from the amount computed by applying the statutory
federal income tax rate to income before provision for income
taxes. The sources and tax effects of the differences for the
periods presented are as follows:
|
|
|
2019
|
|
|
2018
|
|
|
Income tax provision at the federal
statutory rate
|
|
|
21 |
% |
|
|
21 |
% |
|
Effect on operating losses
|
|
(21
|
%)
|
|
(21
|
%)
|
|
|
|
|
- |
|
|
|
- |
|
The net deferred tax assets
consist of the following:
|
|
|
August 31,
2019
|
|
|
August 31,
2018
|
|
|
Deferred tax asset
|
|
$ |
254,847 |
|
|
$ |
208,570 |
|
|
Valuation allowance
|
|
|
(254,847 |
) |
|
|
(208,570 |
) |
|
Net deferred tax asset
|
|
$ |
- |
|
|
$ |
- |
|
The change in the valuation
allowance for the year ended August 31, 2019 was an increase of
$46,277.
NOTE 8 – COMMITMENTS AND
CONTINGENCIES
The Company could become a
party to various legal actions arising in the ordinary course of
business. Matters that are probable of unfavorable outcomes to the
Company and which can be reasonably estimated are accrued. Such
accruals are based on information known about the matters, the
Company’s estimates of the outcomes of such matters and its
experience in contesting, litigating and settling similar matters.
As of the date of this report, there are no pending legal
proceedings to which the Company is a party or of which any of
their property is the subject, nor are there any such proceedings
known to be contemplated by governmental authorities.
There was a bank account set
up during the third quarter of 2019 to work in conjunction with a
marketing company in the name of Green Money Enterprises, LLC. The
arrangement allowed for merchant services payments to flow to this
account and day to day expenses for marketing and consulting
services to be accessed and for Green Money Enterprises to access
this account per those expenses. In March 2019, the representative
from Green Money Enterprises whom had the authority to access the
bank account took various withdrawals from the account totaling
$19,104. They were not authorized to take this money from the
account and have since paid back $6,500 of the original $19,104.
The net amount of these is recorded within the general and
administrative expenses in the accompanying consolidated statement
of operations. The Company is contemplating legal action against
Green Money Enterprises for the money not paid back.
NOTE 9 – DERIVATIVE
LIABILITY
Preferred Stock
Warrants
As discussed in Note 6 –
Stockholders’ Equity, the Company issued a total of 8,480,000
warrants to purchase common stock as part of its preferred stock
offering. The warrants are exercisable for a period of three years
at $0.165 per share. Additionally, the warrant holder is entitled
to a cashless exercise after six months from issuance in which the
holder is entitled to receive a number of shares equal to: [A] the
number of outstanding warrant shares under the original issuance
multiplied by [B] the greater of the trailing five day volume
weighted average price less [A] the number of outstanding warrant
shares under the original issuance multiplied by [C] the exercise
price of the warrant under the original issuance divided by [D] the
lesser of the arithmetic average of the volume weighted average
price during the five trailing trading days or the volume weighted
average price for the trading day immediately prior to the cashless
exercise election. For clarity, the resulting formula is [(A x B) –
(A x C)] / D.
The Company analyzed the
conversion features of the cashless exercise feature in the
warrants issued for derivative accounting consideration under ASC
815-15 “Derivatives and Hedging” and determined that the embedded
features should be classified as a derivative liability because the
exercise price of these warrants are subject to a variable rate.
The Company has determined that warrants are not considered to be
solely indexed to the Company’s own stock and is therefore not
afforded equity treatment. In accordance with ASC 815, the Company
has recorded a derivative liability.
Upon issuance, the Company
valued the derivative using a Black-Scholes model yielding a total
value of $674,012 which was expensed during the year ended August
31, 2018. The Company used the following assumptions upon initial
measurement: value per common share of $0.09, a remaining life of
3.0 years, an exercise price of $0.165, a risk-free rate of 2.77%
and volatility of 195%.
The Company revalued the
derivative liability as of August 31, 2019 and recorded a gain of
$504,898 on the change in fair value of derivative liabilities for
the year then ended. The Company used the following assumptions
upon initial measurement: value per common share of $0.0062, a
remaining life of 1.92 years, an exercise price of $0.165, a
risk-free rate of 1.5% and volatility of 236%.
The following table
summarizes all stock warrant activity for the twelve months
ended August 31, 2019:
|
|
|
Warrants
|
|
|
Weighted-
Average
Exercise
Price
Per Share |
|
|
Outstanding, August 31,
2018
|
|
|
8,480,000 |
|
|
$ |
0.165 |
|
|
Granted
|
|
|
- |
|
|
|
- |
|
|
Exercised
|
|
|
- |
|
|
|
- |
|
|
Forfeited
|
|
|
- |
|
|
|
- |
|
|
Expired
|
|
|
- |
|
|
|
- |
|
|
Outstanding, August 31,
2019
|
|
|
8,480,000 |
|
|
$ |
0.165 |
|
The following table discloses information
regarding outstanding and exercisable warrants at August 31,
2019:
|
|
|
|
Outstanding
|
|
|
Exercisable
|
|
|
Exercise
Prices
|
|
|
Number of
Warrant Shares
|
|
|
Weighted Average
Exercise Price
|
|
|
Weighted Average
Remaining Life
(Years) |
|
|
Number of
Warrant Shares
|
|
|
Weighted Average
Exercise Price
|
|
| $ |
0.165
|
|
|
$ |
8,480,000 |
|
|
$ |
0.165 |
|
|
|
1.92 |
|
|
|
8,480,000 |
|
|
$ |
0.165 |
|
|
|
|
|
|
|
8,480,000 |
|
|
$ |
0.165 |
|
|
|
1.92 |
|
|
|
8,480,000 |
|
|
$ |
0.165 |
|
Convertible Notes
Payable
As discussed in Note
5 – Notes Payable, on August 27, 2019, the
Company signed a $30,000 convertible promissory note with an
investor. The note principal and interest are convertible into
shares of common stock at a 25% discount to the lowest traded price
of the Company’s common stock during the 10 prior trading days
including the day the notice of conversion is received by the
Company.
The Company analyzed the
conversion feature and determine it meets the definition of a
derivative liability instrument because the conversion rate is
variable and therefore does not meet the “fixed-for-fixed” criteria
outlined in ASC 815-40-15. As a result, the conversion features of
the notes are recorded as a derivative liability at fair value and
marked-to-market each period with the changes in fair value each
period charged or credited to other income (expense).
Upon issuance, the Company
valued the derivative using a Monte Carlo simulation model yielding
a total value of $50,277 which was expensed during the year ended
August 31, 2019. The Company used the following assumptions upon
initial measurement: value per common share of $0.0089, a remaining
life of 6 months, an exercise price of $0.00423, a risk-free rate
of 1.98% and volatility of 287%. In addition, the Company
calculated the derivative discount as the difference between the
conversion price and the fair market value of the Company’s common
stock on the date of issuance. The original issue discount
aggregated $27,000, and was recorded as derivative liability in the
accompanying consolidated balance sheet.
The Company revalued the
derivative liability as of August 31, 2019 and recorded a gain of
$16,886 on the change in fair value of derivative liabilities for
the year then ended. The Company used the following assumptions
upon initial measurement: value per common share of $0.0062, a
remaining life of 6 months, an exercise price of $0.00423, a
risk-free rate of 1.99% and volatility of 297%.
Derivative Liability
Summary
As of August 31, 2019 and
2018, respectively, the Company had derivative liabilities totaling
$39,381 and $537,889, respectively, in the accompanying
consolidated balance sheet, and gain on change in fair value of the
derivative liability of $521,784 and $136,123, respectively, in the
accompanying consolidated statement of operations.
NOTE 10 – SUBSEQUENT
EVENTS
On or about September 4, 2019,
the Company signed an initial letter of intent with NanoPeak
Performances, LLC with a subsequent addendum for the sale of the
majority of its existing inventory as well as the exclusive license
to Gridiron intellectual property. As of December 13, 2019,
the two parties are still negotiating the terms of the contemplated
transaction.
On, November 19, 2019, the Company issued
228,571 restricted shares of the Company’s common stock for the
four separate common stock subscriptions granted during the
year ended August 31, 2018. The stock subscriptions represented
total cash proceeds of $160,000, which funded in the year ended
December 31, 2018.
On November 25,
2019, the Company signed a convertible promissory note with an
investor. The $140,000 note was issued with an original issue
discount of $14,000 and bears interest at 10% per year. The note
principal and interest are convertible into shares of common stock
equal to the lower of 5% per share or 35% discount to the lowest
traded price of the Company’s common stock during the 10 prior
trading days including the day the notice of conversion is received
by the Company. The note matures on May 25, 2020. The note has a
prepayment penalty of 115% of the principal and interest
outstanding if repaid more than 30 days after issuance. If the
Company defaults on the note, the payment premium increases to 140%
of the principal and interest outstanding.
In November 2019, the Company made a
strategic decision to expand into the oil extraction business and
on or about November 27, 2019, the Company signed a Supply
Agreement with a grower to purchase 10,000 pounds of industrial
hemp (biomass) and plans on processing the biomass into crude
within the next 60 days. The Company anticipates a third party
provider will process the biomass and generate 400 liters of crude
with minimum 60% total cannabinoids (CBD). The estimated contract
price is $100,000.
On December 13, 2019, the Company signed a
Toll Processing Agreement with a corporation to process industrial
hemp (biomass) into the CBD product. The contract is valued at
$100,000.
The Company has evaluated all events
occurring subsequently to these financial statements through
December 17, 2019 and determined there were no other items to
disclose.
None.
DISCLOSURE CONTROLS AND
PROCEDURES
Under the supervision and
with the participation of our management, consisting solely of our
President, who is our principal executive officer and principal
financial officer, we are responsible for conducting an evaluation
of the effectiveness of the design and operation of our internal
controls and procedures, as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as of the end
of the fiscal year covered by this report. Disclosure controls and
procedures means that the material information required to be
included in our Securities and Exchange Commission (“SEC”) reports
is recorded, processed, summarized and reported within the time
periods specified in SEC rules and forms relating to our company,
including any consolidating subsidiaries, and was made known to us
by others within those entities, particularly during the period
when this report was being prepared. Based on this evaluation, our
principal executive officer and principal financial officer
concluded as of the evaluation date that our disclosure controls
and procedures were not effective as of August 31, 2019.
MANAGEMENT’S ANNUAL
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
As of August 31, 2019,
management, consisting solely of our President, who is our
principal executive officer and principal financial officer,
assessed the effectiveness of our internal control over financial
reporting. The Company’s management is responsible for establishing
and maintaining adequate internal control over financial reporting
for the Company. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the
Securities Exchange Act of 1934, as amended, as a process designed
by, or under the supervision of, the Company’s President, who is
our principal executive officer and principal financial officer,
and effected by the Company’s Board of Directors, management and
other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP in the
United States of America and includes those policies and procedures
that:
|
|
·
|
Pertain to the maintenance
of records that in reasonable detail accurately and fairly reflect
our transactions and dispositions of our assets;
|
|
|
|
|
|
·
|
Provide reasonable assurance
our transactions are recorded as necessary to permit preparation of
our financial statements in accordance with GAAP, and that receipts
and expenditures are being made only in accordance with
authorizations of our management and directors; and
|
|
|
|
|
|
·
|
Provide reasonable assurance
regarding prevention or timely detection of unauthorized
acquisition, use or disposition of our assets that could have a
material effect on the financial statement.
|
In evaluating the
effectiveness of our internal control over financial reporting, our
management used the criteria set forth by the 2013 version of
Committee of Sponsoring Organizations of the Treadway Commission
(“COSO”) in Internal Control – Integrated Framework. Based on that
evaluation, completed only by Timothy Orr, our President and Chief
Executive Officer, and a director, who also serves as our principal
financial officer and principal accounting officer, Mr. Orr
concluded that, during the period covered by this report, such
internal controls and procedures were not effective to detect the
inappropriate application of US GAAP rules as more fully described
below.
This was due to deficiencies
that existed in the design or operation of our internal controls
over financial reporting that adversely affected our internal
controls and that may be considered to be material weaknesses. The
matters involving internal controls and procedures that our
management considered to be material weaknesses under the standards
of the Public Company Accounting Oversight Board were: (i) lack of
a functioning audit committee due to a lack of a majority of
independent members and a lack of a majority of outside directors
on our board of directors, resulting in ineffective oversight in
the establishment and monitoring of required internal controls and
procedures; (ii) inadequate segregation of duties consistent with
control objectives; and (iii) ineffective controls over period end
financial disclosure and reporting processes. The aforementioned
material weaknesses were identified by our President, who also
serves as our principal financial officer and principal accounting
officer, in connection with the review of our financial statements
as of August 31, 2019.
Management believes that the
lack of a functioning audit committee and the lack of a majority of
outside directors on our board of directors results in ineffective
oversight in the establishment and monitoring of required internal
controls and procedures, which could result in a material
misstatement in our financial statements in future periods.
CHANGES IN INTERNAL
CONTROL OVER FINANCIAL REPORTING.
There were no changes in the
Company’s internal control over financial reporting that occurred
during the year ended August 31, 2019 that have materially
affected, or that are reasonably likely to materially affect, the
Company’s internal control over financial reporting.
None.
PART III
Our executive officers and
directors and their respective ages as of the date of filing of
this Annual Report on Form 10-K are as follows:
|
Name
|
|
Age
|
|
Positions
|
|
|
|
|
|
|
Timothy Orr
|
|
48
|
|
President, Secretary,
Treasurer and director
|
Timothy Orr
President, Secretary,
Treasurer and director
Timothy Orr, age 48, has
served as our President and a director since October 9, 2017. He
has also served as Secretary and Treasurer since February 28, 2018.
Mr. Orr has over 20 years of legal, business and public and private
company experience. Mr. Orr’s law practice focuses on business
formation and financing tailored to small and medium size
companies. Mr. Orr has acted as outside counsel for publicly traded
companies as well as private companies seeking equity financing for
the expansion of their business. Additionally, since 2004, Mr. Orr
has owned and operated Jameson Capital, LLC, a business development
consulting services company. In 1994, Mr. Orr obtained a BA in
Biology from Whitworth University, and in 1998, he obtained a JD
from Gonzaga School of Law. Mr. Orr’s background as a lawyer and
desire to participate in the management of GridIron BioNutrients,
Inc. led to our conclusion that he should serve as a director in
light of our business and structure.
TERM OF OFFICE
All directors hold office
until the next annual meeting of the stockholders of the Company
and until their successors have been duly elected and qualified.
The Company’s Bylaws provide that the Board of Directors will
consist of no less than three members. Officers are elected by and
serve at the discretion of the Board of Directors.
DIRECTOR
INDEPENDENCE
Our board of directors is
currently composed of one member, and such member does not qualify
as independent directors in accordance with the published listing
requirements of the NASDAQ Global Market (the Company has no plans
to list on the NASDAQ Global Market). The NASDAQ independence
definition includes a series of objective tests, such as that the
director is not, and has not been for at least three years, one of
our employees and that neither the director, nor any of his family
members has engaged in various types of business dealings with us.
In addition, our board of directors has not made a subjective
determination as to our director that no relationships exist which,
in the opinion of our board of directors, would interfere with the
exercise of independent judgment in carrying out the
responsibilities of a director, though such subjective
determination is required by the NASDAQ rules. Had our board of
directors made these determinations, our board of directors would
have reviewed and discussed information provided by our director
and us with regard to our director’s business and personal
activities and relationships as they may relate to us and our
management.
EMPLOYMENT
AGREEMENTS
We have no employment
agreement with any person.
INDEMNIFICATION
AGREEMENTS
Timothy Orr, our President,
Secretary, Treasurer and a director has entered into an
Indemnification Agreement dated October 9, 2017, with the Company,
pursuant to which the Company agreed to indemnify him for claims
against each of them that may arise in connection with the
performance of his duties as an officer or director for the
Company.
FAMILY
RELATIONSHIPS
No family relationships
exist between Timothy Orr, our President, Secretary, Treasurer
and a director and any other person who is an affiliate of the
Company.
CERTAIN LEGAL
PROCEEDINGS
No director, person
nominated to become a director, executive officer, promoter or
control person of our company has, during the last ten years: (i)
been convicted in or is currently subject to a pending a criminal
proceeding (excluding traffic violations and other minor offenses);
(ii) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to any federal or state securities or banking or
commodities laws including, without limitation, in any way limiting
involvement in any business activity, or finding any violation with
respect to such law, nor (iii) any bankruptcy petition been filed
by or against the business of which such person was an executive
officer or a general partner, whether at the time of the bankruptcy
or for the two years prior thereto.
SIGNIFICANT EMPLOYEES AND
CONSULTANTS
Other than our officers and
directors, we currently have no other significant employees.
AUDIT COMMITTEE AND
CONFLICTS OF INTEREST
Since we do not have an
audit or compensation committee comprised of independent directors,
the functions that would have been performed by such committees are
performed by our directors. The Board of Directors has not
established an audit committee and does not have an audit committee
financial expert, nor has the Board of Directors established a
nominating committee. The Board is of the opinion that such
committees are not necessary since the Company is an early
development stage company and has only one director, and to date,
such director has been performing the functions of such
committees. Thus, there is a potential conflict of interest in that
our directors and officers have the authority to determine issues
concerning management compensation, nominations, and audit issues
that may affect management decisions.
There are no family
relationships among our directors or officers. Other than as
described above, we are not aware of any other conflicts of
interest with any of our executive officers or directors.
SECTION 16(A) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the
Securities Exchange Act of 1934 requires our executive officers and
directors, and persons who own more than ten percent of a
registered class of our equity securities, file reports of
ownership and changes in ownership with the SEC. Executive
officers, directors and greater-than-ten percent stockholders are
required by SEC regulations to furnish us with all Section 16(a)
forms they file. Based on our review of filings made on the SEC
website, and the fact of us not receiving certain forms or written
representations from certain reporting persons that they have
complied with the relevant filing requirements, we believe that,
during the year ended August 31, 2019, our executive officers,
directors and greater-than-ten percent stockholders complied with
all Section 16(a) filing requirements.
STOCKHOLDER
COMMUNICATIONS WITH THE BOARD OF DIRECTORS
We have not implemented a
formal policy or procedure by which our stockholders can
communicate directly with our Board of Directors. Nevertheless,
every effort has been made to ensure that the views of stockholders
are heard by the Board of Directors or individual directors, as
applicable, and that appropriate responses are provided to
stockholders in a timely manner. We believe that we are responsive
to stockholder communications, and therefore have not considered it
necessary to adopt a formal process for stockholder communications
with our Board. During the upcoming year, our Board will continue
to monitor whether it would be appropriate to adopt such a
process.
CODE OF ETHICS
The Company has not adopted
a code of ethics that applies to its principal executive officers,
principal financial officer, principal accounting officer or
controller, or persons performing similar functions.
SUMMARY COMPENSATION
TABLE
The table below summarizes
all compensation awarded to, earned by, or paid to our Officers for
all services rendered in all capacities to us as of the year ended
August 31, for the fiscal years ended as indicated, and as the date
of filing of this Annual Report on Form 10-K.
Summary Compensation
Table
|
Name and
Principal Position
|
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock Awards
($)*
|
|
|
Option Awards
($)*
|
|
|
Non-Equity Incentive Plan
Compensation ($)
|
|
|
Nonqualified Deferred
Compensation ($)
|
|
|
All Other
Compensation($)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Darren Long (1)
|
|
2019
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
|
2018
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy Orr (2)
|
|
2019
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
99,600 |
|
|
|
99,600 |
|
|
|
|
2018
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
-0- |
|
|
|
8,300 |
|
|
|
8,300 |
|
|
|
|
|
|
|
|
|
|
|
|
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Brian Martinho (3)
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2019
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-0- |
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-0- |
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-0- |
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-0- |
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-0- |
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-0- |
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-0- |
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-0- |
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2018
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-0- |
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-0- |
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-0- |
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-0- |
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-0- |
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-0- |
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-0- |
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-0- |
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_____________
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(1)
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Appointed Chief Executive
Officer, Secretary and Chairman of the Board of Directors, on
October 9, 2017. Resigned as Chief Executive Officer, Secretary and
Chairman of the Board of Directors, on February 27, 2018.
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(2)
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Appointed President and
director on October 9, 2017. Appointed Secretary and Treasurer on
February 27, 2018.
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(3)
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Appointed Treasurer and
director on October 9, 2017. Resigned as Treasurer and director on
February 27, 2018.
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Except as disclosed in the
Summary Compensation Table above, there has been no compensation
awarded to, earned by, or paid to the executive officers by any
person for services rendered in all capacities to us for the fiscal
period ended August 31, 2019, and through the date of filing of
this Annual Report on Form 10-K
Option
Grants
The following table sets
forth stock option grants and compensation for the fiscal year
ended August 31, 2019, and as the date of filing of this Annual
Report on Form 10-K:
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Option Awards
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Stock Awards
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Name
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Number of Securities
Underlying Unexercised Options (#) Exercisable
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Number of Securities
Underlying Unexercised Options (#) Unexercisable
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Equity Incentive Plan
Awards: Number of Securities Underlying Unexercised Unearned
Options (#)
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Option Exercise Price
($)
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Option
Expiration
Date
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Number of Shares or Units
of Stock That Have Not Vested (#)
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Market Value of Shares or
Units of Stock That Have Not Vested ($)
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Equity Incentive Plan
Awards: Number of Unearned Shares, Units or Other Rights That Have
Not Vested (#)
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Equity Incentive Plan
Awards: Market or Payout Value of Unearned Shares, Units or Other
Rights That Have Not Vested ($)
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Timothy Orr (1)
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-0- |
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-0- |
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-0- |
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$ |
-0- |
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N/A |
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-0- |
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-0- |
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-0- |
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-0- |
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____________
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(1)
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Appointed President and
director on October 9, 2017. Appointed Secretary and Treasurer on
February 27, 2018.
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Option Exercises and
Fiscal Year-End Option Value Table.
There were no stock options
exercised by the named executive officers as of the end of the
fiscal period ended August 31, 2019 and through the date of filing
of this Annual Report on Form 10-K.
Long-Term Incentive
Plans and Awards
There were no awards made to
a named executive officer, under any long-term incentive plan, as
of the end of the fiscal period ended August 31, 2019 and through
the date of filing of this Annual Report on Form 10-K.
Other
Compensation
There are no annuity,
pension or retirement benefits proposed to be paid to officers,
directors, or employees of our company in the event of retirement
at normal retirement date as there was no existing plan as of the
end of the fiscal year ended August 31, 2019, and through the date
of filing of this Annual Report on Form 10-K, provided for or
contributed to by our company.
DIRECTOR
COMPENSATION
The following table sets
forth director compensation as of August 31, 2019, and as the date
of filing of this Annual Report on Form 10-K:
|
Name
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Fees Earned or Paid in
Cash
($)
|
|
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Stock Awards ($)
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Option Awards ($)
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Non-Equity Incentive Plan
Compensation($)
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Nonqualified Deferred
Compensation Earnings
($)
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All Other
Compensation($)
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Total
($)
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Timothy Orr (1)
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-0- |
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-0- |
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-0- |
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-0- |
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-0- |
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-0- |
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-0- |
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_____________
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(1)
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Appointed President and
director on October 9, 2017. Appointed Secretary and Treasurer on
February 27, 2018.
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The following table lists,
as of the date of this Form 10-K, the number of shares of common
stock of our Company that are beneficially owned by (i) each person
or entity known to our Company to be the beneficial owner of more
than 5% of the outstanding common stock; (ii) each officer and
director of our Company; and (iii) all officers and directors as a
group. Information relating to beneficial ownership of common stock
by our principal shareholders and management is based upon
information furnished by each person using “beneficial ownership”
concepts under the rules of the Securities and Exchange Commission.
Under these rules, a person is deemed to be a beneficial owner of a
security if that person has or shares voting power, which includes
the power to vote or direct the voting of the security, or
investment power, which includes the power to vote or direct the
voting of the security. The person is also deemed to be a
beneficial owner of any security of which that person has a right
to acquire beneficial ownership within 60 days. Under the
Securities and Exchange Commission rules, more than one person may
be deemed to be a beneficial owner of the same securities, and a
person may be deemed to be a beneficial owner of securities as to
which he or she may not have any pecuniary beneficial interest.
Except as noted below, each person has sole voting and investment
power.
The percentages below are
calculated based on 135,509,220 shares of our common stock issued
and outstanding as of the date of this Form 10-K. We do not have
any outstanding warrant, options or other securities exercisable
for or convertible into shares of our common stock.
|
Title of Class
|
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Name and Address of
Beneficial Owner
(2)
|
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Amount and Nature of
Beneficial Ownership
|
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Percent of
Common Stock
(1)
|
|
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Common Stock
|
|
Timothy Orr (3)
|
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26,527,500 |
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19.5 |
% |
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Common Stock
|
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Grays Peak LLC (4)
|
|
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77,872,500 |
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64.4 |
% |
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All directors and executive
officers as a group (1 person)
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26,527,500 |
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15.0 |
% |
___________
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(1)
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The percentages below are
based on 135,509,220 shares of our common stock issued and
outstanding as of the date of this Form 10-K.
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(2)
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c/o GridIron BioNutrients,
1119 West 1st Ave., Ste. G, Spokane, Washington 99021.
|
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(3)
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Appointed President and
director on October 9, 2017. Appointed Secretary and Treasurer on
February 27, 2018.
|
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(4)
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Voting and/or dispositive
control held by Scott Stevens.
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During the years ended August 31, 2019 and
2018, we paid Timothy Orr, our sole director and officer, $99,600
and 8,300, respectively. During the years ended August 31, 2019 and
2018, we owed Mr. Orr, $38,449 and $0, respectively.
For the years ended August
31, 2019 and 2018, the total fees charged to the company for audit
services, including quarterly reviews were $28,870 and $23,646, and
total fees charged for tax services and other services were $0 and
$0, respectively.
PART IV
(a) The following Exhibits,
as required by Item 601 of Regulation SK, are attached or
incorporated by reference, as stated below.
___________
|
(1)
|
Incorporated by reference to
the Registrant’s Form S-1 (File No. 333-203373), filed with the SEC
on April 13, 2015.
|
|
(2)
|
Incorporated by reference to
the Registrants’ Annual Report on Form 10-K (File No. 000-55852),
filed with the SEC on December 15, 2017.
|
|
(3)
|
Incorporated by reference to
the Registrants’ Current Report on Form 8-K (File No. 000-55852),
filed with the SEC on February 21, 2018.
|
|
(4)
|
Incorporated by reference to
the Registrants’ Current Report on Form 8-K (File No. 000-55852),
filed with the SEC on August 16, 2018.
|
__________
|
*
|
XBRL (Extensible Business
Reporting Language) information is furnished and not filed or a
part of a registration statement or prospectus for purposes of
Sections 11 or 12 of the Securities Act of 1933, as amended, is
deemed not filed for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, and otherwise is not subject to
liability under these sections.
|
ITEM 16. FORM 10-K
SUMMARY
None.
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, thereunto duly authorized.
|
GRIDIRON BIONUTRIENTS,
INC.
|
|
(Name of Registrant)
|
|
|
|
Date: December 17, 2019
|
By:
|
/s/ Timothy Orr
|
|
|
Name:
|
Timothy Orr
|
|
|
Title:
|
President, Secretary,
Treasurer and director (principal executive
officer,
principal accounting officer and
principal financial officer)
|
|
Gridiron Bionutrients (QB) (USOTC:GMVP)
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