Stockholders' Deficit

12 Months Ended

Aug. 31, 2016

Equity [Abstract]

Stockholders' Deficit

NOTE 3 – STOCKHOLDERS’ DEFICIT

Common Stock

Per the merger referred to above (Note 1), the Company effectuated a 1 for 5 reverse exchange on July 20, 2016. This has been retroactively accounted for in the financial statements.

During the year ended August 31, 2015, the Company issued 779,620 shares of its $.001 par value common stock for services valued at $1,549,640.

Effective November 20, 2015, principals of the Company cancelled and returned to treasury a total of 3,538,249 shares of common stock.

Also, effective November 20, 2015, the Company issued a total of 231,240 shares of common stock to investors, officers, and employees of the Company for $80,933 of accounts payable.

On June 9, 2016, the Company entered into an agreement with Dr. Ralph Salvagno our chief executive officer. The agreement is for 24 months or until June 30, 2018 with options to renew for additional 24 months. The Company is to pay an annual salary of $240,000, issue 8,000,000 of common stock that vest immediately. The Company granted 2,000,000 options to purchase 2,000,000 shares of common stock at 50% discount to market or $0.25, whichever is higher. For the year ended August 31, 2016, the Company recorded stock based compensation of $840,000 for the common stock which is not yet issued as of August 31, 2016 and recorded in payables.

Upon receipt of FDA approval for Escozine for Pets, Dr. Salvagno will receive an additional 5,000,000 shares of common stock and will be granted options to purchase an additional 2,000,000 shares of common stock at 50% discount to market or $1.00, whichever is higher, this event has not occurred as of August 31, 2016.

The Black-Scholes pricing model was used to estimate the fair value of the 2,000,000 options issued during the year, using the assumptions of a risk free interest rate of .77%, dividend yield of 0%, volatility of 340%, and an expected life of 2 years. These options were expensed immediately in the amount of approximately $205,000.

On June 13, 2016, the Company entered into an agreement with a consultant for financial services. The agreement is for 36 months or until June 2019 with options to renew for additional 24 months. The Company is to issue 5,000,000 shares of common stock that vest immediately. The Company granted 2,000,000 options to purchase 2,000,000 shares of common stock at 50% discount to market or $0.25, whichever is higher. For the year ended August 31, 2016, the Company recorded stock based compensation of $1,350,000 for the common stock which is not yet issued as of August 31, 2016 and recorded in payables.

The Black-Scholes pricing model was used to estimate the fair value of the 2,000,000 options issued during the year, using the assumptions of a risk free interest rate of .73%, dividend yield of 0%, volatility of 339%, and an expected life of 2 years. These options were expensed immediately in the amount of approximately $531,000.

In June 2016, the Company entered into an agreement with our science officer. The agreement is for 36 months or until June 2019 with options to renew for additional 24 months. The Company is to pay an annual salary of $48,000 in year 1, $72,000 in year 2, and $96,000 in year 3 and to also issue up to 1,000,000 shares of common stock valued at $300,000 that vest over 2 years. For the year ended August 31, 2016, the Company recorded stock based compensation of $25,000 and there remains $275,000 to be expensed; these shares have not been issued as of August 31, 2016 and recorded in payables.

In June 2016, the Company entered into an agreement with an employee for 36 months or until June 2019 with options to renew for additional 24 months. The Company is to pay salary of $10,000 per month and to issue up to 3,000,000 shares of common stock valued at $900,000 that vest over 3 years. For the year ended August 31, 2016, the Company recorded stock based compensation of $50,000 and there remains $850,000 to be expensed; these shares have not been issued as of August 31, 2016 and recorded in payables.

In June 2016, the Company entered into an agreement with an employee for 36 months or until June 2019 with options to renew for additional 24 months. The Company is to pay annual salary of $30,000 year, $54,000 year 2, and $78,000 year 3 and to issue up to 2,000,000 shares of common stock valued at $600,000 that vest over 2 years. For the year ended August 31, 2016, the Company recorded stock based compensation of $50,000 and there remains $550,000 to be expensed ; these shares have not been issued as of August 31, 2016 and recorded in payables.

Options

The Company granted 4,000,000 options to purchase 4,000,000 shares of common stock at 50% discount to market or $0.25, whichever is higher. The options have a 2 year term and vest immediately.

Option activity for the years ended August 31, 2016 and 2015, was as follows:

	Shares		Weighted average exercise price		Weighted average remaining life (yrs)		Grant date fair value
Outstanding – August 31, 2014		-	$	-		-	$	-
Options granted		-		-		-		-
Options exercised		-		-		-		-
Options forfeited		-		-		-		-
Outstanding – August 31, 2015		-		-		-		-
Options granted		4,000,000		.25		2.00		736,374
Options exercised		-		-		-		-
Options forfeited		-		-		-		-
Outstanding – August 31, 2016		4,000,000	$	.25		1.77	$	736,374
Vested at August 31, 2016		4,000,000	$	.25		1.77	$	736,374
Exercisable at August 31, 2016		4,000,000	$	.25		1.77	$	736,374