The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Innovation1 Biotech Inc. (the “Company”) was formed under the laws of the state of Nevada in 2014, under the name of My Cloudz, Inc. Gridiron BioNutrients completed a reverse merger with My Cloudz, Inc. in October 2017 and the Company then changed its name to Gridiron BioNutrients, Inc. Effective March 31, 2022, as approved by the shareholders, the name of the Company was changed from Gridiron BioNutrients, Inc. (trading symbol GVMP) to Innovation1 Biotech Inc. (trading symbol IVBT).

Pursuant to an exclusive worldwide, royalty-bearing license (as more fully described below in Note 9 – Subsequent Events) to research, develop, make or have made, use, import, market, offer for sale, and sell the licensed assets (each a “Licensed Asset”), the Company intends to (1) sell natural supplements under the brand name NutraFlu and Nutravid19 (together, referred to as “Nutra”) for the treatment of symptoms associated with the flu and long covid, respectively, based on research conducted by the licensor on its anti-viral NLC001 clinical programs and (2) develop the licensors Phase II clinical program for its anti-viral molecule designated NLC001, for the treatment of long covid and other viral indications.

The Company has elected an August 31^st year end.

Change in Control

On November 9, 2021, the Company completed the asset acquisition of ST Biosciences, Ltd., consisting substantially of intellectual property assets, relating to Mioxal® as discussed in Note 3 – Asset Acquisition. The closing of the acquisition resulted in a change of control of the Company. As part of the acquisition, Mr. Orr stepped down as the Company’s Chief Executive Officer and assumed the role of the Company’s Chief Financial Officer. Mr. Orr has since resigned from his position and as a director. Pursuant to the terms of the Asset Purchase Agreement, Jeffrey J. Kraws was appointed as the Company’s Chief Executive Officer and a director of the Company. On December 6, 2022, Mr. Kraws stepped down as the Company’s Chief Executive Officer. He remains a director. In addition, the Company agreed to appoint Jason Frankovich as a director of the Company subject to the Company’s compliance with Rule 14F-1 of the Exchange Act. Mr. Frankovich has since resigned as a director. On December 6, 2022, Frederick E. Pierce was appointed as the Interim Acting Chief Executive Officer. See “Note 9- Subsequent Events.”

Going Concern

The Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company had no revenue and a net loss of $544,973 for the six months ended February 29, 2024. The Company has a working capital deficit of $2,785,022 and an accumulated deficit of $59,570,727 as of February 29, 2024. These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year of the issuance of these financial statements. The unaudited condensed 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 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

This summary of accounting policies for Innovation1 is presented to assist in understanding the Company’s financial statements. The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“US GAAP”), which have been consistently applied in the preparation of the financial statements.

The accompanying unaudited financial information as of and for the three and six months ended February 29, 2024 and February 28, 2023 has been prepared in accordance with US GAAP for interim financial information and with the instructions to the Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, such financial information includes all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position at such date and the operating results and cash flows for such periods. Operating results for the three and six months ended February 29, 2024 are not necessarily indicative of the results that may be expected for the entire year or for any other subsequent interim period.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission, or the SEC. These unaudited financial statements and related notes should be read in conjunction with our audited financial statements for the year ended August 31, 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC on January 17, 2024 (the “2023 Form 10-K”). 

The condensed consolidated balance sheet at August 31, 2023 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles in the U.S. for complete financial statements.

Basis of Consolidation

The unaudited condensed consolidated financial statements include the accounts of Innovation1 Biotech Inc. and its wholly owned subsidiary. Intercompany accounts and transactions have been eliminated in consolidation.

Cash and cash equivalents

The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. The Company did not have any cash equivalents as of February 29, 2024 and August 31, 2023.

Fair Value of Financial Instruments

Fair value of certain of the Company’s financial instruments including cash, prepaid expenses, accounts payable, accrued expenses, notes payable, and other accrued liabilities approximate cost because of their short maturities. The Company measures and reports fair value in accordance with ASC 820, “Fair Value Measurements and Disclosure” defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value investments.

Fair value, as defined in ASC 820, is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset should reflect its highest and best use by market participants, principal (or most advantageous) markets, and an in-use or an in-exchange valuation premise. The fair value of a liability should reflect the risk of nonperformance, which includes, among other things, the Company’s credit risk.

Valuation techniques are generally classified into three categories: the market approach; the income approach; and the cost approach. The selection and application of one or more of the techniques may require significant judgment and are primarily dependent upon the characteristics of the asset or liability, and the quality and availability of inputs. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 also provides fair value hierarchy for inputs and resulting measurement as follows:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3: Unobservable inputs for the asset or liability that are supported by little or no market activity, and that are significant to the fair values.

Fair value measurements are required to be disclosed by the Level within the fair value hierarchy in which the fair value measurements in their entirety fall. Fair value measurements using significant unobservable inputs (in Level 3 measurements) are subject to expanded disclosure requirements including a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (i) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings, and a description of where those gains or losses included in earning are reported in the statement of income.

The Company did not have any Level 1 or Level 2 assets and liabilities at February 29, 2024, and August 31, 2023. The Company had Level 3 liabilities related to outstanding warrants at February 29, 2024. All financial assets and liabilities approximate fair value.

Property and Equipment

Property and equipment are carried at cost. Expenditures for maintenance and repairs are expensed in the period incurred. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in income for the period.

Depreciation is computed for financial statement purposes on a straight-line basis over estimated useful lives of the related assets and the modified accelerated cost recovery system for federal income tax purposes. The estimated useful lives of depreciable computers and other equipment are three years. 

With the asset acquisition as discussed in Note 3 – Asset Acquisition the Company wrote off the remaining property and equipment as impaired in the statement of operations for the year ended August 31, 2022. Depreciation expense was $261 and $0 for the three months ended February 29, 2024 and February 28, 2023, respectively. Depreciation expense was $523 and $523 for the six months ended February 29, 2024 and February 28, 2023, respectively.

Basic and Diluted 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 Series B and Series B1 convertible preferred shares would convert to 43,181,919 shares of the Company’s common stock in addition to the 22,470,239 outstanding shares at February 29, 2024. The Series B and Series B1 Convertible Preferred shares would convert to 39,120,691 shares of the Company’s common stock in addition to the 20,020,239 outstanding shares at February 28, 2023. The Company would calculate diluted earnings per share by dividing the Company’s net income available to common shareholders less preferred dividends by the diluted weighted average number of shares outstanding during the period. For the three and six month periods ended February 29, 2024 and February 28, 2023, potentially dilutive convertible preferred stock were excluded from the computation of diluted loss per share because they were anti-dilutive due to net losses in those periods.

Recently Adopted Accounting Standards

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, as part of its overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. The ASU becomes effective for public business entities for fiscal years beginning after December 15, 2021, and December 15, 2023, for all other entities. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company early adopted the new guidance on November 30, 2023, using the modified retrospective approach and recorded a cumulative effect upon adoption of $69,142 as a reduction to accumulated deficit and a reduction to paid in capital of $164,660 related to amounts attributable to conversion options that had previously been recorded in equity.

Recently Issued Accounting Standards

As of February 29, 2024, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.

NOTE 3 – ASSET ACQUISITION

On October 27, 2021, the Company entered into an asset acquisition agreement with ST Biosciences, Ltd., a company organized under the laws of England and Wales (“STB”), of certain Transferred Assets, consisting substantially of their intellectual property relating to Mioxal®, a nutraceutical complex composed of essential amino acids, natural coenzymes and minerals. The Company acquired certain intellectual property, patent rights, and no tangible assets and assumed certain liabilities of STB, as discussed below. The acquisition was completed pursuant to the terms of the Amended and Restated Asset Purchase Agreement dated November 9, 2021. As consideration for the acquisition, the Company paid $350,000 in cash to Ingenius, paid cash of $500,000 to STB and issued 19,831,623 shares of Common Stock to STB valued at $40,654,827 or $2.05 per share based on the closing market price on November 5, 2021, which at the closing of the acquisition represented approximately 70% of the Company’s outstanding shares of Common Stock on a fully diluted basis, for an aggregate purchase price of $41,504,827, resulting in a change in control of the Company. The shares were issued in December 2021.

At acquisition the assets and liabilities assumed have been recorded at the fair values as follows:

 Schedule of Fair Value of assets and liabilities

During the year ended August 31, 2022, additional intangibles of $28,773 were added related to the asset acquisition for payments made subsequent to the acquisition date.

The Mioxal® intellectual property, including the patent rights, was acquired by STB from Ingenius Biotech S.L, a Spanish corporation (“Ingenius”) on September 10, 2021. The Ingenius milestone and stock payments set forth in the Purchase Agreement between Ingenius and STB, were assumed by the Company in aggregate of $39,500,000 and are recorded in current and long-term liabilities in the accompanying consolidated balance sheets. The first installment of $1,500,000 was due on January 15, 2022, the second installment of $1,500,000 on April 15, 2022 and a $3,500,000 payment was due within thirty business days following the occurrence of the milestone event. The milestone, a signed sales agreement with a third party to distribute Mioxal throughout Europe, was not reached and therefore the requirement for the milestone payment was forfeited and will never be owed. In addition, $15,000,000 was to be paid through the issuance of the Company’s common stock in three tranches beginning twelve months from execution of agreement with STB on September 10, 2021:

The remaining balance was to be paid on an earn-out basis where under Ingenius would earn an 8% royalty on all sales generated by Mioxal® until the balance was satisfied.

On January 13, 2022, the Company entered into Amendment No. 1 to Purchase Agreement with Ingenius Biotech S.L. to modify the terms of the agreement dated September 10, 2021. Under the amended agreement, the first installment of $1,500,000 was due on June 30, 2022, with an additional extension of the due date to August 30, 2022 (not paid), and the second installment was due on December 31, 2022. See Sale of Mioxal Intangible Assets below for additional details. 

The Mioxal® asset had a 24-year life and was to be tested for impairment on an annual basis. During the three and twelve months ended August 31, 2022, amortization of $846,494 and $2,539,483 was expensed. The other intangible assets for $178,000 have a 21-year life. During the three and twelve months ended August 31, 2022, amortization of $2,119 and $6,357 was expensed. During the twelve months ended August 31, 2022, additional intangibles were added related to the asset acquisition in the amount of $38,638.

The assumptions used for estimated future royalty cash stream included 1) 5% royalty on gross margin for a five-year period of estimated sales in the United States, with a two-year introductory delay in taking the product to market, 2) a similar royalty on international sales, with an additional two-year introductory delay and an increased cost of 15% for additive distribution costs, 3) an estimate of approximately 200,000 units sold in year 1 of the projected royalty stream for a total sales estimate of approximately $7,500,000, and 4) sales growth rates of 100% for each of the years 2 through 4, decreasing to 60% in year 5. Growth rate in any subsequent year would be expected to drop off significantly or to 0%, however, those possible future years are not included in the project revenues, costs or gross merging. The projections of foundational sales volumes, revenues and costs were performed by industry experts in January 2022 as part of an independent product evaluation. As with all projections, Management cannot ensure that the estimated amounts will be actualized.

Sale of the Mioxal Intangible Assets:

On November 7, 2022, the Company completed the disposition of all the assets, including intellectual property assets, and obligations relating to Mioxal® to Ingenius Biotech S.L., a corporation organized under the laws of Spain (“Ingenius”). As part of the disposition, certain shareholders of the Company transferred an aggregate of 350,000 shares of the Company’s currently outstanding common stock, to Ingenius and Ingenius agreed to pay the Company (i) $100,000 upon the first to occur of Ingenius’ first sale or commercialization of the Mioxal product or Ingenius’ sale, license, transfer or other disposition of the Mioxal product to a third party, and (ii) a 5% royalty on worldwide net sales of the Mioxal product by Ingenius or a third party commencing on the date of the first sale of Mioxal products and ending on the 18-month anniversary of the last to expire of any patent covering the Mioxal products. Additionally, Ingenius agreed to release the Company from all of its liabilities and obligations relating to the Mioxal products and indemnify the Company from all claims relating to the Mioxal product following the date of the disposition. After the disposition of the assets and liabilities related to Mioxal, the Company recognized a $3,380,076 royalty asset, recorded as an intangible asset on the consolidated balance sheet. As of August 31, 2023, the royalty asset balance was $0 and the Company recorded additional impairment expense of $3,380,076. As of August 31, 2023 the Company wrote off the $100,000 of cash yet to be received to impairment expense.

NOTE 4 – NOTES PAYABLE

Short-Term Notes Payable

On September 14, 2017, the Company issued a $10,000 promissory note to a limited liability company. The loan bears interest at 5% and had a maturity date of September 15, 2018. The unpaid balance including accrued interest was $13,230 and $12,982 at February 29, 2024 and August 31, 2023, respectively. The Company is in default with the repayment terms of the note. Interest of $248 and $248 was expensed during the six months ended February 29, 2024 and 2023, respectively.

In the three months ended November 30, 2023, the Company issued $40,000 in promissory notes to limited liability companies. The loans bear interest at 10% and have a 90-day maturity date. The unpaid balance including accrued interest was $40,440 at February 29, 2024. Interest of $440 and $0 was expensed during the six months ended February 29, 2024 and 2023, respectively.

Convertible Notes Payable

The Company has entered into a private placement to receive net cash proceeds up to $300,000, after the original issue discount, from secured convertible promissory notes with attached $0.08 warrants to purchase up to 4,411,764 shares of common stock. Each note is discounted 15% with a maturity date of 18 months from original issuance. The notes bear interest of 8% per annum to be paid monthly. Each note is convertible into common shares by dividing the outstanding principal on the note by the conversion price of $0.08. The warrants are exercisable for a period of seven years at an exercise price of $0.08 per share.

During the six months ended February 29, 2024, the Company received convertible notes of $294,115 less a discount of $44,115, for cash proceeds of $250,000. The Company issued 6,911,764 warrants and recorded a fair value of $250,000 for the warrants. Each note is discounted 15% with a maturity date of 13 months from original issuance. The notes bear interest of 8% per annum to be paid monthly and a conversion price of $0.08 and $0.025 per share. The warrants are exercisable for a period of seven years at an exercise price of $0.08 and $0.025 per share.

The total fair value of the warrants was estimated using the following weighted average assumptions:

Schedule of weighted average assumption of fair value of warrants 

Prior to the adoption of ASU 2020-06, a beneficial conversion feature of $170,445 was determined to exist, which represented the lesser of the conversion price of the convertible instrument or the per share fair value of the underlying stock into which it is convertible. Upon adoption of ASU 2020-06 on November 30, 2023, the beneficial conversion feature that remained of $72,685 and all previously booked amortization in the amount of $97,760 was reversed to interest expense in the amount of $28,618 and $69,142 to additional paid in capital on the condensed consolidated balance sheet.

At February 29, 2024, the Company had outstanding convertible notes payable of $985,812 less remaining unamortized discounts of $430,750 for a net liability of $555,062. The Company recognized a total of $132,800 of discount amortization to interest expense during the six months ended February 29, 2024.

NOTE 5 – RELATED PARTY TRANSACTIONS

The Company has a contract with two consulting and pharmaceutical firms owned by the former Chief Science Officer, Salzman Group LLC and Herring Creek Pharmaceuticals, under which research and development activities are performed on behalf of the Company. During the fiscal year 2022, the Company paid $150,000 for a security deposit, that was impaired as of August 31, 2023, $131,500 for research and development fees, and assumed $67,000 in a liability from ST Biosciences at the acquisition of the assets described in Note 3 - Asset Acquisition. The $67,000 liability was released during the twelve months ended August 31, 2023, and was credited to the Mioxal intangible asset. As of August 31, 2023, the Company owed $10,165 to these two firms and owed salary of $30,769 to Dr. Salzman. As of August 31, 2023, the Company wrote off the $10,165.

As of February 29, 2024 and August 31, 2023, the Company owed salary of $76,154 and $76,154, respectively, to Jason Frankovich, a former director.

NOTE 6 – LEASE LIABILITY

On January 1, 2022, we adopted ASC Topic 842 – Leases. Under this new guidance, lessees are required to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases. Upon adoption, we recognized operating lease right-of-use (“ROU”) assets and corresponding lease liabilities of $619,825.

Lessee accounting

We determine if an arrangement is or contains a lease at inception. Our assessment is based on (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period and (3) whether we have the right to direct the use of the asset. Leases are classified as either finance leases or operating leases. A lease is classified as a finance lease if any one of the following criteria are met: the lease transfers ownership of the asset by the end of the lease term, the lease contains an option to purchase the asset that is reasonably certain to be exercised, the lease term is for the majority of the remaining useful life of the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified as an operating lease if it does not meet any one of these criteria. The lease classification affects the expense recognition in the income statement. Operating lease costs are recorded entirely in operating expenses. Finance lease costs are split, where amortization of the ROU asset is recorded in operating expenses and an implied interest component is recorded in interest expense.

Under the guidance of ASC 842, operating leases are included in right-of-use assets, current lease liabilities, and noncurrent lease liabilities on our balance sheets. ROU assets and lease liabilities are recognized at commencement date based on the present value of the future minimum lease payments over the lease term. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at transition date in determining the present value of future payments. The ROU asset includes any lease payments made but excludes lease incentives and initial direct costs incurred, if any. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Lease extensions

Many leases have options to either extend or terminate the lease. In determining the lease term, we considered all available contract extensions that are reasonably certain of occurring.

Operating leases

On January 1, 2022, the Company entered into an operating lease for office space. The lease is effective for 3 years from the commencement date with automatic renewal at the expiration date. The lease agreement may be terminated earlier upon ninety days’ prior written notice by either party. The lease requires adjustment upon renewal with an increase to the monthly rent by 10% of the monthly rent due for the month preceding such renewal date or market rate, whichever is the greater amount.

The Company was unable to pay its December 2022 lease payment and the owner sought legal action. The Company was served with a summons in December 2022. The summons sought a judgment of $480,000 plus interest at 5%. The lease was terminated as of December 1, 2022, and a gain on termination of $19,236 was recorded during the six months ended February 28, 2023. The Company accrued $484,668, which included $4,668 for interest, for the legal claim sought by the owner. On September 28, 2023, the Company entered into a settlement agreement with 40 Wall Street Suites LLC on its past due lease payment. The agreement calls for the Company to pay 40 Wall Street Suites LLC a total of $40,000 as follows: (i) $20,000 within 15 days of complete execution of this letter agreement, and (ii) $20,000 within 45 days of complete execution of this letter agreement. In addition, the Company agrees and acknowledges that 40 Wall Street Suites LLC shall be entitled to retain the security deposit previously made. In exchange for the payments and the related agreements 40 Wall Street Suites LLC agrees not to take any action to pursue the litigation. As of August 31, 2023, the Company reduced the $484,688 settlement accrual to $40,000 as stated in the executed settlement agreement.  

NOTE 7 – STOCKHOLDERS’ EQUITY

Dividends

During the year ended August 31, 2018, the Company issued Series A Convertible Preferred Stock, which accrues dividends at a rate of 5% annually. The Company exchanged the Series A Convertible Preferred for Series B Preferred Stock. As a result of the Exchange agreement, the dividends on the Series A Convertible Preferred Stock was reduced to $0 in the accompanying consolidated balance sheets. The Series B and Series B1 Convertible Preferred Stock accrues dividends at a rate of 10% annually. There was $2,213,084 and $1,748,625 of dividends payable at February 29, 2024, and August 31, 2023, respectively. The dividends have not been declared and are accrued in the accompanying unaudited condensed consolidated balance sheets as a result of a contractual obligation in the Company’s Series B and Series B1 Preferred Stock offering.

Preferred Stock

There were no shares of Series A Convertible Preferred Stock issued and outstanding as of February 29, 2024 and August 31, 2023.

There were 2,694,514 shares of Series B Convertible Preferred Stock issued and outstanding as of February 29, 2024, and August 31, 2023. There were 5,389,028 shares of Series B-1 Convertible Preferred Stock issued and outstanding as of February 29, 2024, and August 31, 2023.

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

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

Common Stock

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

During the six months ended February 29, 2024, the Company issued 2,000,000 shares of restricted common stock under a settlement agreement.

There were 22,470,239 and 20,470,239 common shares issued and outstanding as of February 29, 2024, and August 31, 2023, respectively.

NOTE 8 – COMMITMENTS AND CONTINGENCIES

On September 30, 2022, a party identified as New You Inc. filed a complaint with the Eighth Judicial District Court of Clark County, Nevada against Innovation 1 Biotech, Inc, ST Biosciences LTD, Jeffrey Kraws and Jason Frankovich. The complaint alleges that during Mr. Frankovich’s service to New You Inc. as Chairman of the Board of Directors, concurrent with Mr. Frankovich’s and Mr. Kraws’ services as executives of ST Biosciences LTD, Mr. Frankovich converted funds away from New You Inc. to satisfy obligations of ST Biosciences LTD and/or Innovation1 and/or to enrich Frankovich and Kraws. The amount of the claim was a total of $249,020 plus damages in excess of $30,000 and included a claim for legal fees. The Company received a letter dated March 26, 2025 containing a Notice of Execution after Judgment in the amount $35,234,462, following a default judgment issued on April 17, 2024 by the court in favor of New You Inc. New management is investigating the veracity of the claims and determining what options the Company has to overturn or resolve this matter.