10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: February 28, 2018

or

☐  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 000-52759

BESPOKE EXTRACTS, INC.

(Exact name of registrant as specified in its charter)

Nevada	20-4743354
(State or other jurisdiction  of incorporation)	(IRS Employer  Identification No.)

323 Sunny Isles Boulevard, Suite 700

Sunny Isles Beach, FL 33160

(Address of principal executive offices)

855-633-3738

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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 past 12 months, and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☒   No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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  ☒   No  ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller reporting company	☒
		Emerging growth company	☒

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 ☒

As of April 27, 2018, there were 37,803,907 shares outstanding of the registrant’s common stock.

TABLE OF CONTENTS

		Page No.
PART I - FINANCIAL INFORMATION		1
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Plan of Operations	8
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	12
Item 4	Controls and Procedures	12
PART II - OTHER INFORMATION		13
Item 1.	Legal Proceedings	13
Item 1A.	Risk Factors	13
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	13
Item 3.	Defaults Upon Senior Securities	13
Item 4.	Mine Safety Disclosures	13
Item 5.	Other Information	13
Item 6.	Exhibits	13

PART I

ITEM 1. FINANCIAL STATEMENTS 

Bespoke Extracts, Inc.

Consolidated Balance Sheets

(Unaudited)

	February 28,			August 31,
	2018			2017
Assets
Current assets
Cash	$	138,092		$	87,172
Prepaid expense		-			19,952
Inventory		69,522			-
Total current assets		207,614			107,124
Domain names, net of amortization of $3,346 and $1,673		46,839			48,512
Intellectual property, net of amortization of $0 and $0 respectively		-			-
Total assets	$	254,453		$	155,636
Liabilities and Stockholders' Deficit
Current liabilities
Accounts payable and accrued liabilities	$	34,731		$	36,525
Deposit for future assets sales from related party		127,750			45,000
Convertible note related party, net unamortized discount $20,708 and $0		187,092			123,000
Note payable - related party		30,050			30,050
Total current liabilities		379,623			234,575
Non-current liabilities
Related Party convertible note payable net of unamortized discount $397,107 and $346,837		322,893			193,163
Total non-current liabilities		322,893			193,163
Total liabilities		702,516			427,738
Stockholders' Deficit
Series A Convertible Preferred Stock, $0.001 par value, 50,000,000 authorized shares; no shares issued and outstanding as of February 28, 2018 and August 31, 2017, respectively		-			-
Common stock, $0.001 par value: 800,000,000 authorized; 33,022,712 and 26,822,712 shares issued and outstanding as of February 28, 2018 and August 31, 2017, respectively		33,023			26,823
Additional paid-in capital		11,523,422			8,808,161
Accumulated deficit		(12,004,508	)		(9,107,086	)
Total stockholders' deficit		(448,063	)		(272,102	)
Total liability and stockholders' deficit	$	254,453		$	155,636

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

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Bespoke Extracts, Inc

Consolidated Statements of Operations

(Unaudited)

	For the three			For the three			For the six			For the six
	months ended			months ended			months ended			months ended
	February 28,			February 28,			February 28,			February 28,
	2018			2017			2018			2017
Operating expenses:
Selling, general and administrative expenses	$	1,604,256		$	5,812		$	2,539,001		$	14,264
Payroll expense		1,743			21,123			21,114			45,686
Professional fees		27,677			5,000			51,640			13,613
Consulting		22,415			-			77,000			-
Promotion		20,365			-			20,365			-
Brand development		-			10,000			-			10,000
Formula development		-			7,500			-			7,500
Impairment of intellectual property		-			1,248			-			1,248
Amortization expense		796			33			1,632			66
Total operating expenses		1,677,252			50,716			2,710,752			92,377
Loss from operations		(1,677,252	)		(50,716	)		(2,710,752	)		(92,377	)
Other expense
Interest expense		(50,222	)		(2,104	)		(186,670	)		(2,944	)
Total other expense		(50,222	)		(2,104	)		(186,670	)		(2,944	)
Loss before income tax		(1,727,474	)		(52,820	)		(2,897,422	)		(95,321	)
Provision for income tax		-			-			-			-
Net Loss	$	(1,727,474	)	$	(52,820	)	$	(2,897,422	)	$	(95,321	)
Net loss per common share: basic and diluted	$	(0.05	)	$	(0.02	)	$	(0.09	)	$	(0.03	)
Weighted average common shares outstanding basic and diluted		32,540,490			2,923,907			30,550,613			2,923,907

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

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Bespoke Extracts, Inc

Consolidated Statements of Cash Flows

(Unaudited)

	For the six months ended
	February 28,				February 28,
	2018				2017
Cash flows from operating activities
Net loss	$	(2,342,000	)	$	(95,321		)
Adjustments to reconcile net loss to net cash used in operating activities
Amortization expense		1,673				66
Amortization of debt discount		200,521
Option expense amortized		579,419
Stock based compensation		1,855,043				-
Impairment of intellectual property						1,248
Changes in operating assets and liabilities
Inventory		(69,522	)
Prepaid expense		19,952
Accounts payable and Accrued Liabilities		(1,794	)			16,794
Accounts payable - related party		-				(14,609	)
Accrued interest						2,944
Deposit for future assets sales from related party		82,750				-
Net Cash used in operating activities		(229,380	)			(88,878	)
Cash flows from investing
Cash paid for domain names		-				(19,867	)
Net cash provided by investing activities		-				(19,867	)
Cash flow from financing activities
Payment of note payable - related party		-				(5,500	)
Proceeds from sale of common stock		60,300				-
Borrowings on related party convertible debt		220,000				-
Proceeds from note payable - related party		-				120,000
Net cash provided by financing activities		280,300				114,500
Net increase in cash and cash equivalents		50,920				5,755
Cash and cash equivalents at beginning of period		87,172				431
Cash and cash equivalents at end of period	$	138,092			$	6,186
Supplemental disclosure of cash flow information
Cash paid during period for
Cash paid for interest	$	-			$	-
Cash paid for income taxes		-				-
Noncash investing and financing activities:
Discount due beneficial conversion feature	$	123,000			$	-
Stock issued for conversion of debt	$	35,200			$	-
Stock issued with related party debt	$	51,503				-
Warrants issued with related party debt	$	16,996				-

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

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Bespoke Extracts, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 — BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Bespoke Extracts, Inc, a Nevada corporation (the “Company”), have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. These unaudited consolidated financial statements and related notes should be read in conjunction with the Company’s annual report on Form 10-K for the fiscal year ended August 31, 2017. In the opinion of management, these unaudited consolidated financial statements reflect all adjustments that are of a normal recurring nature and which are necessary to present fairly the financial position of the Company as of February 28, 2018, and the results of operations and cash flows for the three and six months ended February 28, 2018 and February 28, 2017. The results of operations for the three and six months ended February 28, 2018 are not necessarily indicative of the results that may be expected for the entire fiscal year.

Certain prior period amounts have been reclassified to conform to current period presentation.

Going Concern

The accompanying interim consolidated financial statements have been prepared assuming a continuation of the Company as a going concern. The Company did not generate any revenues and reported a net loss of $2,897,422 for the six months ended February 28, 2018.  These conditions raise substantial doubt about our ability to continue as a going concern.

The Company’s ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. There is no assurance that this series of events will be satisfactorily completed. The accompanying financial statements do not contain any adjustments that may result from the outcome of this uncertainty.

Inventory

Inventories are stated at the lower of cost or market value.  Cost is determined by the first-in, first-out basis and market being determined as the lower of replacement cost or net realizable value. The Company records inventory write-downs for estimated obsolescence of unmarketable inventory based upon assumptions about future demand and market conditions. As of February 28, 2018, inventory amounted to $69,522 which consists of $53,743 in finished goods and $15,779 in raw materials.

2. EQUITY 

Common Stock

The Company was formed in the state of Nevada on April 13, 2006. The Company has authorized capital of 800,000,000 shares of common stock with a par value of $0.001, and 50,000,000 shares of preferred stock with a par value of $0.001.

On September 18, 2017, the Company issued 900,000 shares of common stock in connection with the issuance of a convertible note with a principal amount of $180,000. The relative fair value of the stock of $51,503 was recognized as a discount to the note that is being amortized to interest expense over the life of the note.

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On September 22, 2017, the company issued 900,000 shares of common stock and 300,000 warrants pursuant to a stock purchase agreement for cash of $60,300.

On November 10, 2017, the Company issued an aggregate of 1,400,000 shares of common stock to the holder of a related party 7% Convertible Promissory Note, to convert principal amount of $11,200.

On November 27, 2017, the Company issued an aggregate of 1,450,000 shares of common stock to the holder of a related party 7% Convertible Promissory Note, to convert principal amount of $11,600.

On November 10, 2017, the Company issued an aggregate of 1,550,000 shares of common stock to the holder of a 7% Convertible Promissory Note, dated November 14, 2016 to convert principal amount of $12,400.

For the six months ended February 28, 2017, the Company recognized option expense of $579,419 for options granted on July 26, 2017 to a nonemployee for services. As of February 28, 2018, $484,756 remains to be expensed over the remaining service period through July 26, 2019.

Warrants

During the quarter ended February 28, 2018, warrant activity included the following: 

On September 18, 2017, the Company executed an $180,000 Convertible Debenture with an original issue discount of $60,000. In connection with the debenture, the Company issued the lender 300,000 common stock purchase warrants with a term of 3 years and an exercise price of $1.00. The relative fair value of the warrants of $16,996 was recognized as a discount to the debenture.

On May 22, 2017, the Company entered into an employment agreement with Marc Yahr to serve as President and Chief Executive Officer of the Company for a term of three years, unless earlier terminated pursuant to the terms of the Employment Agreement. Pursuant to the terms of the Employment Agreement, Mr. Yahr received a warrant to purchase up to 20,000,000 shares of the Company’s common stock at an exercise price of $0.0001 per share. The warrants were exercised in full on May 31, 2017; however, the 20,000,000 shares of the Company’s common stock were not issued to Mr. Yahr until June 10, 2017. The shares received upon the exercise of the warrants are subject to forfeiture and vest over a service period of three years. The fair value of the award was determined to be $10,998,105 which will be recognized as compensation expense over the three year service period.  Warrant expense under this award for the six months ended February 28, 2018 totaled $1,818,626. As of February 28, 2018, $8,165,716 remains to be expensed over the remaining vesting period.

On January 22, 2018, the Company entered into a Sales Representation Agreement for a term of six months. Pursuant to the agreement the Company agreed to issue the nonemployee sales representative warrants to purchase 10,000 shares of common stock per month (an aggregate of 60,000 warrants) with an exercise price of $0.50, with a term of three years. The Warrants shall be exercisable at any time on or after the six (6) month anniversary of each Issuance Date, at his election, in whole or in part, by means of a “cashless exercise”. The fair value of this award was determined to be $60,618 of which $30,380 was recognized during the six months ended February 28, 2018.

On February 22, 2018, the Company entered into a Consulting Agreement for a term of one year. Pursuant to the agreement the Company agreed to issue the nonemployee consultant warrants to purchase 10,000 shares of common stock per month (an aggregate of 120,000 warrants) with an exercise price of $0.40, exercisable for cash only for a period of three years commencing six months form the issuance date. The fair value of this award was determined to be $113,943 of which $6,037 was recognized during the six months ended February 28, 2018.

The fair value of the warrants was estimated using the Black-Scholes option pricing model and the following range of assumptions:

	Grant Date	February 28, 2018
Risk-free interest rate at grant date	1.06% - 1.44%	1.06% - 1.49%
Expected stock price volatility	117% - 362%	117% - 362%
Expected dividend payout	-	-
Expected option in life-years	1 - 3 years	1 - 3 years

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3. ASSET PURCHASE AGREEMENT

On August 29, 2017, the Company received $82,750 as a deposit from a significant shareholder toward the purchase price on an agreement that was being negotiated with VMI Acquisitions, LLC for purchase of certain of our Company’s assets. The agreement was completed and closed on March 9, 2018. 

4. NOTES PAYABLE – RELATED PARTY

On April 27, 2016, the Company issued to the Company’s CEO a 7% unsecured promissory note in the amount of $2,500 which matured six months from the date of issuance. On July 5, 2016, the Company issued to the Company’s CEO a 7% unsecured note in the amount of $3,000 which matured six months from date of issuance. On November 17, 2016, the Company repaid the principal amount of the notes, or $5,500. As of February 28. 2018, there is a remaining balance on the note of $50.

On February 14, 2017, the Company issued to Lyle Hauser, the Company’s largest shareholder, a 7% unsecured promissory note in the amount of $30,000 which matured six months from the date of issuance. As of February 28, 2018 the outstanding balance on the note is $30,000

5. CONVERTIBLE DEBENTURE – RELATED PARTY 

On May 17, 2016, the Company issued to Vantage Group, a significant shareholder, a 7% unsecured promissory note in the amount of $10,000 which had an original maturity of six months from the date of issuance. On August 15, 2016, the Company issued to Vantage Group, a significant shareholder, a 7% unsecured promissory note in the amount of $16,000 which had an original maturity of six months from the date of issuance. On October 27, 2016, the Company issued a significant shareholder a 7% unsecured promissory note in the amount of $10,000 which had an original maturity date of six months from the date of issuance. On November 14, 2016, the Company issued a significant shareholder a 7% unsecured promissory note in the amount of $80,000 which had an original maturity date of six months from the date of issuance. On March 31, 2017, the Company issued a significant shareholder a 7% unsecured promissory note in the amount of $7,000 which had an original maturity date of six months from the date of issuance.

On April 17, 2017 the preceding notes issued to Vantage Group were amended to be convertible into common stock and to mature on April 18, 2018. The convertible notes have a fixed conversion price of $0.008. The amendments to the notes has created a Beneficial Conversion Feature of $123,000 and amortization of the discount of $118,018 during the 6 months ended February 28, 2018. On November 27, 2017, the Company issued an aggregate of 1,450,000 shares of common stock to the holder of a 7% Convertible Promissory Note, dated November 14, 2016 to convert principal amount of $11,600. On November 10, 2017, the Company issued an aggregate of 1,400,000 shares of common stock to the holder of a 7% Convertible Promissory Note, dated November 14, 2016 to convert principal amount of $11,200. On December 28, 2017, the Company issued an aggregate of 1,550,000 shares of common stock to the holder of a 7% Convertible Promissory Note, dated November 14, 2016 to convert principal amount of $12,400. As of February 28, 2018 a total of $35,200 has been converted.

	February 28, 2017
Convertible debenture	$	123,000
Conversion		(35,200	)
Unamortized discount		(4,982	)
Convertible debenture, net of unamortized discount	$	82,818

On April 11, 2017, the Company executed a $540,000 Convertible Debenture with an original issue discount of $180,000. The debenture has a 0% interest rate and a term of two years. In connection with the debenture, the Company issued the lender an aggregate of 2,700,000 shares of common stock and 900,000 common stock purchase warrants. The relative fair value of the stock and warrants aggregating $202,490 was recognized as a discount to the note. Amortization of $64,686 was recognized during the six months ended February 28, 2018. The conversion price of the outstanding balance is the lesser of $3.00 or 40% of the volume weighted average price of the 30 days at date of conversion; not to be less than $1.00. In connection with the debenture the lender is entitled to receive the greater of 5% every dollar raised through financing or every dollar of revenue generated through the earlier of maturity date and repayment of the principal.

	February 28, 2017
Convertible debenture	$	540,000
Unamortized discount		(282,152	)
Convertible debenture, net of unamortized discount	$	257,848

On September 18, 2017, the Company executed, with a related party, an $180,000 Convertible Debenture with an original issue discount of $60,000. The note has a 0% interest rate and a term of two years. In connection with the note, the Company issued the lender an aggregate of 900,000 shares of common stock and 300,000 warrants to purchase common stock. The relative fair value of the stock and warrants aggregating $68,499 was recognized as a discount to the note. Amortization of $13,543 was recognized during the six months ended February 28, 2018. The conversion price of the outstanding balance is the lesser of $3.00 or 40% of the volume weighted average price of the 30 days at date of conversion; not to be less than $1.00. In connection with the debenture the lender is entitled to receive the greater of 5% of every dollar raised through financing or every dollar of revenue generated through the earlier of the maturity date or repayment of the principal.

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	February 28, 2017
Convertible debenture	$	180,000
Unamortized discount		(114,955	)
Convertible debenture, net of unamortized discount	$	65,045

On December 13, 2017, the Company executed a $120,000 Convertible Debenture with an original issue discount of $20,000. Amortization of $4,274 was recognized during the six months ended February 28, 2018. The debenture has a 0% interest rate and a term of one year. The conversion price of the outstanding balance is the lesser of $3.00 or 40% of the volume weighted average price of the 30 days at date of conversion; not to be less than $1.00. In connection with the debenture the lender is entitled to receive the greatest of 5% every dollar raised through financing or every dollar of revenue generated through the earlier of maturity date and repayment of the principal.

	February 28, 2017
Convertible debenture	$	120,000
Unamortized discount		(15,726	)
Convertible debenture, net of unamortized discount	$	104,274

6. SUBSEQUENT EVENTS

On March 5, 2018, Bespoke Extracts, Inc. (the “Company”) entered into a securities purchase agreement with an accredited investor. Pursuant to the purchase agreement, upon closing on March 7, 2018, the Company issued and sold to the investor, 3,000,000 shares of common stock for an aggregate purchase price of $300,000. The Company agreed to issue additional shares of common stock (the “Make-Good Shares”) to the investor for no additional consideration, in the event that, during the six month period commencing on the closing date, the Company sells common stock at a purchase price lower than $0.10 (the “Subsequent Financing Price”), such that the total number of shares of common stock received by the investor under the purchase agreement (including the Make-Good Shares and the initial shares) will be equal to the total purchase price of $300,000 divided by such lower Subsequent Financing Price.

On March 9, 2018, the Company issued an aggregate of 1,780,000 shares of common stock to the holder of a 7% Convertible Promissory Note, dated November 14, 2016 to convert principal amount of $14,240.

On March 9, 2018, Bespoke Extracts, Inc. (the “Company”) entered into and closed an asset purchase agreement with VMI Acquisitions, LLC (“VMI”), pursuant to which the Company sold to VMI the Company’s proprietary Machine-to-Machine communications solution and certain other intellectual property for a purchase price of $180,000. $135,000 of the purchase price was paid by members of VMI in cash and had previously been deposited with the Company. The remaining $45,000 of the purchase price was paid in the form of a reduction in outstanding debt and reimbursements of expenses owed to a member of VMI. Certain members of VMI are noteholders and/or shareholders of the Company.

The Company entered into a Management Agreement with Global Corporate Management, LLC. Pursuant to this agreement, the Company to pay $4,000 and to issue 150,000 common stock purchase warrants (exercise price of $0.50, 5 year term, exercisable 6 months after issuance).

The Company entered into a consulting agreement with Patagonia Global Trading, LLC. Upon execution of this agreement and upon the Consultant signing their first customer, acceptable by the Company, and for services rendered, the Company will immediately issue 50,000 common stock purchase warrants to purchase common stock at an exercise price of $.30 per share.

The Company entered into a consulting agreement with Dr. David Hellman for marketing and promotion services. The term is 1 year with payment of 50,000 warrants to purchase common stock with an exercise price of $0.60. However, if the Consultant generates more than $10K in monthly sales, the Warrants will have an exercise price of $.30, and if the Consultant generates more than $20K in monthly sales, the Warrants may be exchanged in "cashless exercise". Additionally, the Company shall pay 10% of retail sales and 5% of wholesale sales.

7. COMMITMENTS AND CONTINGENCIES

The Company entered into a consulting agreement with Optimal Setup LLC for a term of one year to advise the Company on search engine optimization and digital marketing. Optimal Setup LLC shall receive monthly for services performed $2,500 and 10,000 warrants for common stock exercisable for cash price of $0.40. Warrants may be exercised after six month anniversary date.

On January 22, 2018, the Company entered into a Sales Representation Agreement to manage and solicit orders in a set territory, the United States, with an initial term of six months. The sales representative shall be compensated 6% of the net sales and three year warrants monthly to purchase 10,000 shares of common stock at an exercise price of $0.50. Warrants may be exercised after six month anniversary of issuance date.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

We and our representatives may from time to time make written or oral statements that are “forward-looking,” including statements contained in this Quarterly Report and other filings with the SEC, reports to our stockholders and news releases. All statements that express expectations, estimates, forecasts or projections are forward-looking statements. In addition, other written or oral statements which constitute forward-looking statements may be made by us or on our behalf. Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” “project,” “forecast,” “may,” “should,” and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in or suggested by such forward-looking statements. We undertake no obligation to update or revise any of the forward-looking statements after the date of this Quarterly Report to conform forward-looking statements to actual results, except as may be required under applicable law. Important factors on which such statements are based are assumptions concerning uncertainties, including but not limited to, uncertainties associated with the following:

● Inadequate capital and barriers to raising the additional capital or to obtaining the financing needed to implement our business plans;

● Our failure to earn revenues or profits;

● Inadequate capital to continue business;

● Volatility, lack of liquidity or decline of our stock price;

● Potential fluctuation in quarterly results;

● Rapid and significant changes in markets;

● Litigation with or legal claims and allegations by outside parties; and

● Insufficient revenues to cover operating costs.

The following discussion should be read in conjunction with the financial statements and the notes thereto which are included in this Quarterly Report.

Overview

Cine-Source Entertainment, Inc. (the “Old Corporation”) a Colorado corporation, was formed on July 29, 1988. Pursuant to a Plan of Merger dated February 24, 2004, the Old Corporation filed Articles and Certificate of Merger with the Secretary of State of the State of Colorado merging the Old Corporation into Cine-Source Entertainment, Inc. (the “Surviving Corporation”), a Colorado corporation. The name of the Surviving Corporation was changed to First Quantum Ventures, Inc., on April 27, 2004. On April 13, 2006, the Surviving Corporation formed a wholly owned subsidiary, a Nevada corporation named First Quantum Ventures, Inc., and on May 5, 2006 merged the Surviving Corporation with and into this subsidiary.

On March 15, 2012, the Company changed its name to DiMi Telematics, International, Inc.

In early 2017, our management team elected to suspend further investment and working capital on developing the Company’s technology and business prospects, turning its attention to prevailing new business opportunities in other high growth industries; namely the hemp-derived cannabidiol (“CBD”) market. On March 10, 2017, the Company changed its name to Bespoke Extracts, Inc. (formerly known as DiMi Telematics, Inc.) to align the Company’s corporate identity with its new business plan.

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The Company is now focused on bringing to market a proprietary line of premium, quality, all natural CBD products in the forms of tinctures, capsules, drops and edibles for the nutraceutical and veterinary markets. Produced using pure, all natural, zero-THC phytocannabinoid-rich (“PCR”) hemp-derived isolate, our products will be marketed as dietary supplements through wholesale channels and direct-to-consumers via our retail ecommerce store found at www.bespokeextracts.com.

Plan of Operations

We have not yet commenced sales of our products but anticipate doing so in the near future. Our introductory retail line of premium CBD extracts comes in the form of tinctures including:

● All-Natural, Pure Hemp-Derived CBD Extract with raw Mānuka Honey.

● All-Natural, Pure Hemp-Derived CBD Extract for Pets with bacon flavoring.

Generally speaking, most CBD products for oral consumption available on the market have an earthy, bitter taste that some observers suggest is reminiscent of chlorophyll. The centerpiece of the Company’s introductory line of great-tasting tinctures is our formulation which infuses pure, raw, all-natural, un-pasteurized Mānuka honey into our hemp-derived CBD extract.

Our Mānuka honey, imported directly from New Zealand, is one of the most unique and beneficial forms of honey in the world and carries the industry’s highest Unique Manuka Factor (UMF^®) 16+ rating, distinguishing it as superior high grade Mānuka. Legislated by the UMF Honey Association (http://www.umf.org.nz/), the UMF rating system provides for a quality trademark and grading system identifying natural unadulterated Mānuka honey that has a special unique natural property found only in some strains of Mānuka honey. High grade (10+) Mānuka honey contains a high concentration of methylglyoxal, giving the honey its superior antibiotic quality. Produced by bees that pollinate the native Mānuka bush, general Mānuka honey uses range from healing sore throats and digestive illnesses to curing Staph infections and gingivitis.

In 1982, researchers at the New Zealand University of Waikato discovered that Mānuka honey has a considerably higher level of enzymes than regular honey. (http://www.waikato.ac.nz/news/archive.shtml?article=1087). These enzymes create a natural hydrogen peroxide that works as an antibacterial. The Company’s tinctures are infused with superior high grade, raw Mānuka honey, further enhancing the potential health benefits offered by the CBD isolate we use, and delivering a delicious tasting experience for consumers.

Planned Expansion of Product Line

By the summer of 2018, presuming market conditions are favorable, we expect to expand our retail product offerings to include new flavored options of tinctures, as well as introducing our formulations in the form of lotions and salves. 

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Development Status and Go-to-Market Strategy

We believe the traditional retail environment is experiencing notable economic instability due largely to the global shift in consumer purchasing behaviors – with online shopping/ecommerce sites rapidly overtaking brick-and-mortar stores as consumer preferred shopping venues. In view of this retailing reality, we have adopted a Direct-to-Consumer sales model that will be anchored by a high impact, visually stunning, content-rich ecommerce website whereby we will educate and sell and ship our CBD products directly to consumers. 

Our marketing initiatives will include the use of social marketing, direct response marketing, inbound marketing, email marketing, Search Engine Optimization and content marketing, among other proven strategies. We will also explore utilizing coupon and deal sites to drive traffic to our website and participate in select industry conferences to promote our brand and build greater awareness of our products among prospective business partners and consumers.

Critical Accounting Policies and Estimates

The presentation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.

Intellectual Property

Intellectual property is stated at cost. When retired or otherwise disposed, the related carrying value and accumulated amortization are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. Minor additions and renewals are expensed in the year incurred. Major additions and renewals are capitalized and depreciated over their estimated useful lives being 3 years up to 15 years.

Revenue Recognition

The Company intends to recognize revenue on four basic criteria which must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

Stock Based Compensation

The Company accounts for all compensation related to stock, options or warrants using a fair value based method whereby compensation cost is measured at the grant date for employee awards and upon a commitment date or completion of services for nonemployee awards based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company uses the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. Stock issued for compensation is valued using the market price of the stock on the date of the related agreement.

Employees

As of February 28, 2018, the Company employed no full time and no part time employees other than its Chief Executive Officer.

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Results of Operation for the Three Months Ended February 28, 2018 and FEBRUARY 28, 2017.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the three months ended February 28, 2018 and February 28, 2017 totaled $1,604,256 and $5,812, respectively. Payroll expense amounted to $1,743 and $21,123 for the three months ended February 28, 2018 and February 28, 2017, respectively. Consulting amounted to $22,415 and $0 for the three months ended February 28, 2018 and February 28, 2017. Warrant expenses included in selling, general and administrative totaled $941,045 for warrants issued to the Company’s CEO in 2018 and consulting agreements in 2018.

Amortization Expense

Amortization expense for the three months ended February 28, 2018 and February 28, 2017 totaled $796 and $33, respectively. Amortization expense is in relation to recent URL purchase, prior year amortization is the expensing of intellectual property and the iPhone application.

Interest Expense

Interest expense on promissory notes for the three months ended February 28, 2018 and February 28, 2017, was $50,222 and $2,104, respectively.

Net Loss

For the reasons stated above, our net loss for the three months ended February 28, 2018 totaled $1,727,474 or $(0.05) per share, an increase of $1,674,654 compared to a net loss for the three months ended February 28, 2017 of $52,820, or ($0.02) per share. A significant portion of the net loss for the 2018 period was due to recognition of warrant expense in the amount of $937,921. 

Results of Operation for the Six Months Ended February 28, 2017 and February 28, 2017.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the six months ended February 28, 2018 and February 28, 2017 totaled $2,539,001 and $14,264, respectively. Payroll expense amounted to $21,114 and $45,686 for the six months ended February 28, 2018 and February 28, 2017, respectively. Consulting amounted to $77,000 and $0 for the six months ended February 28, 2018 and February 28, 2017. Warrant expense expenses included in selling, general and administrative totaled $1,855,043 for warrants issued to the Company’s CEO in 2018 and consulting agreements in 2018.

Amortization Expense

Amortization expense for the six months ended February 28, 2018 and February 28, 2017 totaled $1,632 and $66, respectively. Amortization expense is in relation to recent URL purchase, prior year amortization is the expensing of intellectual property and the iPhone application.

Interest Expense

Interest expense on promissory notes for the six months ended February 28, 2018 and February 28, 2017, was $186,670 and $0, respectively

Net Loss

For the reasons stated above, our net loss for the six months ended February 28, 2018 totaled $2,897,422 or $(0.09) per share, an increase of $2,802,101 compared to a net loss for the six months ended February 28,2017 of $95,321, or ($0.03) per share. A significant portion of the net loss for the 2018 period was due to recognition of warrant expense in the amount of $1,855,043.

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LIQUIDITY AND CAPITAL RESOURCES

As of February 28, 2018, we had cash and cash equivalents of $138,092. Net cash used in operating activities for the six months ended February 28, 2018 was approximately $229,380. Our current liabilities as of February 28, 2018 totaled $379,623 consisting of accounts payable and accrued liabilities of $34,731, deposit of $127,750, note payable related party $30,050, and convertible note payables-net, of $187,092.

The accompanying financial statements have been prepared assuming a continuation of the Company as a going concern. The Company has reported a net loss of $2,897,422 for the six months ended February 28, 2018 and had an accumulated deficit of $12,004,508 as of February 28, 2018. These conditions raise significant doubt about our ability to continue as a going concern.

We have not generated positive cash flows from operating activities. The primary source of capital has been from the sale of equity securities. Our primary use of capital has been for professional fees and general and administrative costs. Our working capital requirements are expected to increase in line with the growth of our business.

OFF-BALANCE SHEET ARRANGEMENTS

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Management of the Company conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report.  The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and (ii) accumulated and communicated to our management, including our chief executive officer and chief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Based on this evaluation, our management has concluded that the design and operation of our disclosure controls and procedures are not effective since the following material weaknesses exist:

● Since inception our chief executive officer also functions as our chief financial officer. As a result, our officers may not be able to identify errors and irregularities in the financial statements and reports;

● We were unable to maintain full segregation of duties within our financial operations due to our reliance on limited personnel in the finance function.  While this control deficiency did not result in any audit adjustments to our financial statements, it could have resulted in a material misstatement that might have been prevented or detected by a segregation of duties; and

● Documentation of all proper accounting procedures is not yet complete.

To the extent reasonably possible given our limited resources, we intend to take measures to cure the aforementioned weaknesses, including, but not limited to, increasing the capacity of our qualified financial personnel to ensure that accounting policies and procedures are consistent across the organization and that we have adequate control over financial statement disclosures.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not currently a party to, nor is any of our property currently the subject of, any material legal proceedings.

ITEM 1A. RISK FACTORS

Not required for smaller reporting companies.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On December 13, 2017, the Company issued a convertible debenture in the principal amount of $120,000 to an investor for a purchase price of $100,000. The debenture is convertible into common stock at a conversion price equal to the lower of $3.00 and forty percent 40% of the volume weighted average price for the thirty trading days immediately preceding the conversion date, provided that the conversion price will not be lower than $1.00.

In connection with the foregoing, the Company relied upon the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

As of the date of this filing of this report, the Company is in default on $30,000 in promissory notes issued to a significant shareholder, due to failure to make payment when due, and is in default on an additional$123,000 convertible debenture issued to a significant shareholder, due to failure to make payments when due.

ITEM 4. MINE SAFETY DISCLOSURES

No disclosure required.

ITEM 5. OTHER INFORMATION

On December 13, 2017, the Company issued a convertible debenture in the principal amount of $120,000 to an investor for a purchase price of $100,000. The debenture matures one year from issuance and is convertible into common stock at a conversion price equal to the lower of $3.00 and forty percent 40% of the volume weighted average price for the thirty trading days immediately preceding the conversion date, provided that the conversion price will not be lower than $1.00.

ITEM 6. Exhibits

Exhibit No.	Description
10.1	Convertible Debenture, dated December 13, 2017*
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Calculation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	XBRL Taxonomy Label Linkbase Document*
101.PRE	XBRL Taxonomy Presentation Linkbase Document*

* Filed herewith.

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SIGNATURES

Pursuant to the requirements 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.

	BESPOKE EXTRACTS, INC.
Dated: May 3, 2018	By:	/s/ Marc Yahr
		Marc Yahr President and Chief Executive Officer
		(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

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EX-10.1

EXHIBIT 10.1

THE ISSUANCE AND SALE OF THIS DEBENTURE HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE DEBENTURE MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE DEBENTURE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.

PURSUANT TO THE SUBSCRIPTION AGREEMENT DATED AS OF DECEMBER 13, 2017 BY AND BETWEEN BESPOKE EXTRACTS, INC. AND THE SUBSCRIBER, THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED, SOLD, SOLD SHORT OR OTHERWISE DISPOSED OF, EXCEPT IN ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH IN THE SUBSCRIPTION AGREEMENT BY AND BETWEEN THE HOLDER HEREOF AND BESPOKE EXTRACTS, INC. 

Principal Amount: $120,000.00	Issue Date: December 13, 2017
Purchase Price: $100,000.00

CONVERTIBLE DEBENTURE

FOR VALUE RECEIVED, Bespoke Extracts, Inc., a Nevada corporation (hereinafter called the “Borrower”), hereby promises to pay to the order of McGlothlin Holdings Ltd. or registered assigns (the “Holder”) the sum of $120,000.00 (the “Principal Amount”), on December 12, 2018 the (“Maturity Date”). This convertible debenture (the “Debenture”) may not be prepaid in whole or in part absent the Holder’s prior written consent. Any amount of principal on this Debenture which is not paid when due shall bear interest at the rate of nine percent (9%) per annum from the due date thereof until the same is paid (“Default Interest” and together with the Principal Amount, the “Principal”). Default Interest shall commence accruing on the date that the Debenture is fully paid and shall be computed on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder shall be made in lawful money of the United States of America. All payments shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this Debenture. Whenever any amount expressed to be due by the terms of this Debenture is due on any day which is not a business day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Debenture is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on such date. As used in this Debenture, the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed.

This Debenture is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Borrower.

The following terms shall apply to this Debenture:

Article I. CONVERSION INTO COMMON STOCK

1.1       Voluntary Conversion. Subject to and upon compliance with the provisions of Sections 1.3 through 1.5 of this Debenture, at any time while this Debenture is outstanding, the Holder shall have the right, at its option, to convert all or a part of the outstanding Principal into such number of shares of common stock, par value $0.001 per share (the “Common Stock) equal to the result of dividing the Principal of this Debenture to be converted by the lower of (i) three dollars ($3.00) and (ii) forty percent (40%) of the volume weighted average price (“VWAP”) for the thirty (30) trading days immediately preceding the Conversion Date (defined below) (as may be adjusted for stock splits, stock dividends, subdivisions or combinations of, or similar transactions in, the Common Stock, the “Conversion Price”); provided, however that the Conversion Price shall not be less than one dollar ($1.00).

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1.2       Reduction of Principal. The Principal due hereunder shall automatically be reduced by the amount of Principal that has previously been converted pursuant to Section 1.1 hereof. For purposes of the calculation of Default Interest payable on this Debenture, such reduction of Principal shall be deemed to have occurred as of the date of such conversion.

1.3       Conversion Mechanics. In order to exercise its voluntary conversion rights pursuant to Article I of this Debenture, the Holder shall deliver a written notice of election to convert sent by overnight courier or registered mail (the “Conversion Notice”) setting forth the amount of Principal the Holder is electing to convert, duly completed and signed, to the Company. Each conversion shall be deemed to have been effected immediately prior to the close of business on the first business day following the date that the Conversion Notice is sent to the Company (the “Conversion Date”), and the Holder shall be deemed to have become the holder of record of the shares of Common Stock at such time and on such date.

1.4       Delivery of Certificate(s). As promptly as practicable after delivery by the Holder of the Conversion Notice and in any event within two (2) business days after such delivery, the Company shall issue and deliver to the Holder a certificate or certificates for the number of full shares of Common Stock. In the event that less than the total Principal under this Debenture is converted pursuant to this Article I, the Company shall, simultaneously with the issuance of certificates for the shares of Common Stock issuable upon conversion of all or part of this Debenture, cause the Company to issue and deliver to the Holder (or in accordance with the instructions of the Holder) a new Debenture for the balance of the Principal not so converted. All shares of Common Stock delivered upon conversion of all or part of this Debenture will, upon delivery in accordance with the provisions hereof, be duly and validly issued and fully paid and nonassessable, free of all liens and charges and not subject to any preemptive rights.

1.5       Fractional Shares. No fractional shares or securities representing fractional shares of Common Stock shall be issued upon conversion of all or part of this Debenture. Any fractional interest in a share of Common Stock resulting from conversion of all or part of this Debenture shall be, at the election of the Company, either (i) paid in cash (computed to the nearest cent) equal to such fraction multiplied by the Conversion Price on the date of such conversion or (ii) rounded up to the nearest whole share of Common Stock.

Article II. CERTAIN COVENANTS

2.1Revenue Sharing and Financing. The Holder shall be entitled to receive five percent (5%) of the greater of (i) every dollar the Borrower raises through any financing or (ii) every dollar of revenue generated by the Borrower through the earlier of (i) the Maturity Date and (ii) repayment of the Principal in accordance with the terms of this Debenture.

2.2Negative Covenants. As long as any portion of this Debenture remains outstanding, the Borrower shall not, and shall not permit any of its subsidiaries (whether or not a subsidiary on the Issue Date) to, directly or indirectly:

(a)other than indebtedness (i) existing as of the Issue Date, or (ii) incurred in the ordinary course of business for trade expenses, exclusive of borrowed money (“Permitted Indebtedness”), enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom (other than a guarantee issued with respect to this Debenture).

(b)other than Permitted Liens (as defined below), enter into, create, incur, assume or suffer to exist any liens, charges or encumbrances of any kind or nature (“Liens”), on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom, except those which are expressly subordinate to the indebtedness created by the Debentures. “Permitted Lien” means the individual and collective reference to the following: (a) Liens for taxes, assessments and other governmental charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves (in the good faith judgment of the management of the Borrower) have been established in accordance with GAAP; (b) Liens imposed by law which were incurred in the ordinary course of the Borrower’s business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in the ordinary course of the Borrower’s business, and which (x) do not individually or in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Borrower and its consolidated subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien; or (c) Liens incurred in connection with Permitted Indebtedness under clause (a) hereunder.

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(c)amend its charter documents, including, without limitation, its articles of incorporation and bylaws, in any manner that materially and adversely affects any rights of the Holder;

(d)other than Permitted Indebtedness, repay, repurchase or offer to repay, repurchase or otherwise acquire any indebtedness, other than the Debenture, other than (x) regularly scheduled principal and interest payments as such terms are in effect as of the Issue Date, provided that such payments shall not be permitted if, at such time, or after giving effect to such payment, any Event of Default exists or occurs, (y) Permitted Indebtedness, and (z) ordinary trade debt incurred in the ordinary course of business.

(e)pay cash dividends or cash distributions on any equity securities of the Borrower;

(f)sell, lease or otherwise dispose of any portion of its assets outside the ordinary course of business, other than de minimis sales, unless Borrower offers to prepay the full amount owed under the Debenture in connection with the closing of any such sale, lease or disposition transaction;

(g)lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b) made in the ordinary course of business or (c) not in excess of $10,000; or

(h)enter into any agreement with respect to any of the foregoing.

Article III. EVENTS OF DEFAULT

If any of the following events of default (each, an “Event of Default”) shall occur:

3.1Failure to Pay Principal Amount or Default Interest. Any default in the payment of the Principal Amount of, Default Interest on or other charges in respect of this Debenture, free of any claim of subordination, as and when the same shall become due and payable whether upon the Maturity Date or by acceleration or otherwise, if Borrower does not pay in full the amount that is due and payable within three (3) business days after delivery of a notice of demand therefor from Holder.

3.2Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in this Debenture.

3.3Bankruptcy, Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall commence, or there shall be commenced against the Borrower or any subsidiary of the Borrower under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the Borrower or any subsidiary of the Borrower commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Borrower or any subsidiary of the Borrower or there is commenced against the Borrower or any subsidiary of the Borrower any such bankruptcy, insolvency or other proceeding which remains undismissed for a period of 90 days; or the Borrower or any subsidiary of the Borrower is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or the Borrower or any subsidiary of the Borrower suffers any appointment of any custodian, private or court appointed receiver or the like for it or any substantial part of its property which continues undischarged or unstayed for a period of 90 days; or the Borrower or any subsidiary of the Borrower makes a general assignment for the benefit of creditors; or the Borrower or any subsidiary of the Borrower shall call a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or the Borrower or any subsidiary of the Borrower shall by any act or failure to act expressly indicate its consent to, approval of or acquiescence in any of the foregoing; or any corporate or other action is taken by the Borrower or any subsidiary of the Borrower for the purpose of effecting any of the foregoing (other than actions to dismiss, terminate or resolve any bankruptcy or similar proceeding).

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3.4Indebtedness Default. The Borrower or any subsidiary of the Borrower shall default in any of its obligations under any other note, debenture or any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement of the Borrower or any subsidiary of the Borrower in an amount exceeding $5,000, whether such indebtedness now exists or shall hereafter be created and such default shall result in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable, in each of the above instances where such default would have a (i) a material adverse effect on the legality, validity or enforceability of this Debenture (the “Transaction Documents”), (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and any of its subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) on the Company’s ability to pay the Debenture on the Maturity Date.

3.5Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

3.6Cessation of Operations. Any cessation by Borrower of substantially all of its operations, provided, however, that any disclosure of the Borrower’s ability to continue as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due or of a cessation of operations.

3.7Maintenance of Assets. The failure by Borrower to maintain any material assets which would have a material adverse effect on Borrower’s ability conduct its overall business (whether now or in the future).

Upon the occurrence and during the continuation of any Event of Default specified above, the Debenture shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the Default Sum (as defined herein). Upon the occurrence and during the continuation of any Event of Default the Debenture shall become immediately due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the sum of (w) the outstanding Principal Amount of this Debenture plus (x) Default Interest, plus (y) five percent (5%) of the total Principal Amount then outstanding (the then outstanding Principal Amount of this Debenture to the date of payment plus the amounts referred to in clauses (x) and (y) shall collectively be known as the “Default Sum”) and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity. 

Article IV. MISCELLANEOUS

4.1Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

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4.2Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) when delivered if delivered by hand delivery during a normal business day (or if not on a business day then the next business day), (b) one business day after delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below or (c) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

If to the Borrower, to:

Bespoke Extracts, Inc.

323 Sunny Isles Boulevard

7th Floor

Sunny Isles Beach, FL 33160

Attention: Marc Yahr, President and Chief Executive Officer

If to the Holder:

McGlothlin Holdings, Ltd.

P.O. Box 590

Luling, TX 78648

Attention: Stan McGlothlin

4.3Amendments. This Debenture and any provision hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term “Debenture” and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.

4.4Assignability. This Debenture shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit of the Holder and its successors and assigns. Each transferee of this Debenture must be an “accredited investor” (as defined in Rule 501(a) of the Securities Act of 1933, as amended). Holder may transfer this Debenture provided that the transferee agrees in writing with Borrower to be bound by the provisions of this Debenture, and that such transfer complies with any applicable federal and state securities laws.

4.5Cost of Collection. If default is made in the payment of this Debenture, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys’ fees.

4.6Governing Law. This Debenture shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Debenture shall be brought only in the state courts of New York or in the federal courts located in the state and county of New York. The Borrower hereby irrevocably waives any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The Borrower waives trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Debenture or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. The Borrower hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Debenture or any other Transaction Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Debenture and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

5

4.7Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations under this Debenture will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions of this Debenture, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Debenture and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or other security being required.

4.8Severability. If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder shall violate applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Borrower covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Borrower from paying all or any portion of the principal of or interest on this Debenture as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this indenture, and the Borrower (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impeded the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.

(Signature Page Follows)

6

IN WITNESS WHEREOF, Borrower has caused this Debenture to be signed in its name by its duly authorized officer this 13^th day of December, 2017.

BESPOKE EXTRACTS, INC.
By:	/s/ Marc Yahr
	Marc Yahr Chief Executive Officer

7

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Marc Yahr, certify that:

1)	I have reviewed this Quarterly Report on Form 10-Q of Bespoke Extracts, Inc. (the “registrant”);
2)	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;
3)	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;
4)	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5)	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/ Marc Yahr
	Marc Yahr
	President and Chief Executive Officer (Principal Executive Officer and Principal Financial Officer)
	May 3, 2018

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Bespoke Extracts, Inc., as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, Marc Yahr, the Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

	By:	/s/ Marc Yahr
		Marc Yahr
		President and Chief Executive Officer
		(Principal Executive Officer and Principal Financial Officer)
Dated:  May 3, 2018

XML

Document and Entity Information - shares	6 Months Ended
	Feb. 28, 2018	Apr. 27, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	Bespoke Extracts, Inc.
Entity Central Index Key	0001409197
Amendment Flag	false
Trading Symbol	BSPK
Current Fiscal Year End Date	--08-31
Document Type	10-Q
Document Period End Date	Feb. 28, 2018
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2018
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		37,803,907

XML

Consolidated Balance Sheets (Unaudited) - USD ($)	Feb. 28, 2018	Aug. 31, 2017
Current assets
Cash	$ 138,092	$ 87,172
Prepaid expense		19,952
Inventory	69,522
Total current assets	207,614	107,124
Domain names, net of amortization of $3,346 and $1,673	46,839	48,512
Intellectual property, net of amortization of $0 and $0 respectively
Total assets	254,453	155,636
Current liabilities
Accounts payable and accrued liabilities	34,731	36,525
Deposit for future assets sales from related party	127,750	45,000
Convertible note related party, net unamortized discount $20,708 and $0	187,092	123,000
Note payable - related party	30,050	30,050
Total current liabilities	379,623	234,575
Non-current liabilities
Related Party convertible note payable net of unamortized discount $397,107 and $346,837	322,893	193,163
Total non-current liabilities	322,893	193,163
Total liabilities	702,516	427,738
Stockholders' Deficit
Series A Convertible Preferred Stock, $0.001 par value, 50,000,000 authorized shares; no shares issued and outstanding as of February 28, 2018 and August 31, 2017, respectively
Common stock, $0.001 par value: 800,000,000 authorized; 33,022,712 and 26,822,712 shares issued and outstanding as of February 28, 2018 and August 31, 2017, respectively	33,023	26,823
Additional paid-in capital	11,523,422	8,808,161
Accumulated deficit	(12,004,508)	(9,107,086)
Total stockholders' deficit	(448,063)	(272,102)
Total liability and stockholders' deficit	$ 254,453	$ 155,636

XML

Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($)	Feb. 28, 2018	Aug. 31, 2017
Statement of Financial Position [Abstract]
Net of amortization	$ 3,346	$ 1,673
Amortization of intellectual property	0	0
Net of unamortized discounts	20,708	0
Unamortized discount net	$ 397,107	$ 346,837
Series A convertible preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Series A convertible preferred stock, shares authorized	50,000,000	50,000,000
Series A convertible preferred stock, shares issued
Series A convertible preferred stock, shares outstanding
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	800,000,000	800,000,000
Common stock, shares issued	33,022,712	26,822,712
Common stock, shares outstanding	33,022,712	26,822,712

XML

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 28, 2018	Feb. 28, 2017
Operating expenses:
Selling, general and administrative expenses	$ 1,604,256	$ 5,812	$ 2,539,001	$ 14,264
Payroll expense	1,743	21,123	21,114	45,686
Professional fees	27,677	5,000	51,640	13,613
Consulting	22,415		77,000
Promotion	20,365		20,365
Brand development		10,000		10,000
Formula development		7,500		7,500
Impairment of intellectual property		1,248		1,248
Amortization expense	796	33	1,632	66
Total operating expenses	1,677,252	50,716	2,710,752	92,377
Loss from operations	(1,677,252)	(50,716)	(2,710,752)	(92,377)
Other expense
Interest expense	(50,222)	(2,104)	(186,670)	(2,944)
Total other expense	(50,222)	(2,104)	(186,670)	(2,944)
Loss before income tax	(1,727,474)	(52,820)	(2,897,422)	(95,321)
Provision for income tax
Net Loss	$ (1,727,474)	$ (52,820)	$ (2,897,422)	$ (95,321)
Net loss per common share: basic and diluted	$ (0.05)	$ (0.02)	$ (0.09)	$ (0.03)
Weighted average common shares outstanding basic and diluted	32,540,490	2,923,907	30,550,613	2,923,907

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Feb. 28, 2018	Feb. 28, 2017
Cash flows from operating activities
Net loss	$ (2,897,422)	$ (95,321)
Adjustments to reconcile net loss to net cash used in operating activities
Amortization expense	1,673	66
Amortization of debt discount	200,521
Option expense amortized	579,419
Stock based compensation	1,855,043
Impairment of intellectual property		1,248
Changes in operating assets and liabilities
Inventory	(69,522)
Prepaid expense	19,952
Accounts payable and Accrued Liabilities	(1,794)	16,794
Accounts payable - related party		(14,609)
Accrued interest		2,944
Deposit for future assets sales from related party	82,750
Net Cash used in operating activities	(229,380)	(88,878)
Cash flows from investing
Cash paid for domain names		(19,867)
Net cash provided by investing activities		(19,867)
Cash flow from financing activities
Payment of note payable - related party		(5,500)
Proceeds from sale of common stock	60,300
Borrowings on related party convertible debt	220,000
Proceeds from note payable - related party		120,000
Net cash provided by financing activities	280,300	114,500
Net increase in cash and cash equivalents	50,920	5,755
Cash and cash equivalents at beginning of period	87,172	431
Cash and cash equivalents at end of period	138,092	6,186
Cash paid during period for
Cash paid for interest
Cash paid for income taxes
Noncash investing and financing activities:
Discount due beneficial conversion feature	123,000
Stock issued for conversion of debt	35,200
Stock issued with related party debt	51,503
Warrants issued with related party debt	$ 16,996

XML

Basis of Presentation

6 Months Ended

Feb. 28, 2018

Basis of Presentation [Abstract]

BASIS OF PRESENTATION

NOTE 1 — BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Bespoke Extracts, Inc, a Nevada corporation (the “Company”), have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements. These unaudited consolidated financial statements and related notes should be read in conjunction with the Company’s annual report on Form 10-K for the fiscal year ended August 31, 2017. In the opinion of management, these unaudited consolidated financial statements reflect all adjustments that are of a normal recurring nature and which are necessary to present fairly the financial position of the Company as of February 28, 2018, and the results of operations and cash flows for the three and six months ended February 28, 2018 and February 28, 2017. The results of operations for the three and six months ended February 28, 2018 are not necessarily indicative of the results that may be expected for the entire fiscal year.

Certain prior period amounts have been reclassified to conform to current period presentation.

Going Concern

The accompanying interim consolidated financial statements have been prepared assuming a continuation of the Company as a going concern. The Company did not generate any revenues and reported a net loss of $2,897,422 for the six months ended February 28, 2018.  These conditions raise substantial doubt about our ability to continue as a going concern.

The Company’s ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. There is no assurance that this series of events will be satisfactorily completed. The accompanying financial statements do not contain any adjustments that may result from the outcome of this uncertainty.

Inventory

Inventories are stated at the lower of cost or market value.  Cost is determined by the first-in, first-out basis and market being determined as the lower of replacement cost or net realizable value. The Company records inventory write-downs for estimated obsolescence of unmarketable inventory based upon assumptions about future demand and market conditions. As of February 28, 2018, inventory amounted to $69,522 which consists of $53,743 in finished goods and $15,779 in raw materials.

XML

Equity

6 Months Ended

Feb. 28, 2018

Equity [Abstract]

EQUITY

2. EQUITY 

Common Stock

The Company was formed in the state of Nevada on April 13, 2006. The Company has authorized capital of 800,000,000 shares of common stock with a par value of $0.001, and 50,000,000 shares of preferred stock with a par value of $0.001.

On September 18, 2017, the Company issued 900,000 shares of common stock in connection with the issuance of a convertible note with a principal amount of $180,000. The relative fair value of the stock of $51,503 was recognized as a discount to the note that is being amortized to interest expense over the life of the note.

On September 22, 2017, the company issued 900,000 shares of common stock and 300,000 warrants pursuant to a stock purchase agreement for cash of $60,300.

On November 10, 2017, the Company issued an aggregate of 1,400,000 shares of common stock to the holder of a related party 7% Convertible Promissory Note, to convert principal amount of $11,200.

On November 27, 2017, the Company issued an aggregate of 1,450,000 shares of common stock to the holder of a related party 7% Convertible Promissory Note, to convert principal amount of $11,600.

On November 10, 2017, the Company issued an aggregate of 1,550,000 shares of common stock to the holder of a 7% Convertible Promissory Note, dated November 14, 2016 to convert principal amount of $12,400.

For the six months ended February 28, 2017, the Company recognized option expense of $579,419 for options granted on July 26, 2017 to a nonemployee for services. As of February 28, 2018, $484,756 remains to be expensed over the remaining service period through July 26, 2019.

Warrants

During the quarter ended February 28, 2018, warrant activity included the following: 

On September 18, 2017, the Company executed an $180,000 Convertible Debenture with an original issue discount of $60,000. In connection with the debenture, the Company issued the lender 300,000 common stock purchase warrants with a term of 3 years and an exercise price of $1.00. The relative fair value of the warrants of $16,996 was recognized as a discount to the debenture.

On May 22, 2017, the Company entered into an employment agreement with Marc Yahr to serve as President and Chief Executive Officer of the Company for a term of three years, unless earlier terminated pursuant to the terms of the Employment Agreement. Pursuant to the terms of the Employment Agreement, Mr. Yahr received a warrant to purchase up to 20,000,000 shares of the Company’s common stock at an exercise price of $0.0001 per share. The warrants were exercised in full on May 31, 2017; however, the 20,000,000 shares of the Company’s common stock were not issued to Mr. Yahr until June 10, 2017. The shares received upon the exercise of the warrants are subject to forfeiture and vest over a service period of three years. The fair value of the award was determined to be $10,998,105 which will be recognized as compensation expense over the three year service period.  Warrant expense under this award for the six months ended February 28, 2018 totaled $1,818,626. As of February 28, 2018, $8,165,716 remains to be expensed over the remaining vesting period.

On January 22, 2018, the Company entered into a Sales Representation Agreement for a term of six months. Pursuant to the agreement the Company agreed to issue the nonemployee sales representative warrants to purchase 10,000 shares of common stock per month (an aggregate of 60,000 warrants) with an exercise price of $0.50, with a term of three years. The Warrants shall be exercisable at any time on or after the six (6) month anniversary of each Issuance Date, at his election, in whole or in part, by means of a “cashless exercise”. The fair value of this award was determined to be $60,618 of which $30,380 was recognized during the six months ended February 28, 2018.

On February 22, 2018, the Company entered into a Consulting Agreement for a term of one year. Pursuant to the agreement the Company agreed to issue the nonemployee consultant warrants to purchase 10,000 shares of common stock per month (an aggregate of 120,000 warrants) with an exercise price of $0.40, exercisable for cash only for a period of three years commencing six months form the issuance date. The fair value of this award was determined to be $113,943 of which $6,037 was recognized during the six months ended February 28, 2018.

The fair value of the warrants was estimated using the Black-Scholes option pricing model and the following range of assumptions:

	Grant Date	February 28, 2018
Risk-free interest rate at grant date	1.06% - 1.44%	1.06% - 1.49%
Expected stock price volatility	117% - 362%	117% - 362%
Expected dividend payout	-	-
Expected option in life-years	1 - 3 years	1 - 3 years

XML

Asset Purchase Agreement

6 Months Ended

Feb. 28, 2018

Asset Purchase Agreement [Abstract]

ASSET PURCHASE AGREEMENT

3. ASSET PURCHASE AGREEMENT

On August 29, 2017, the Company received $82,750 as a deposit from a significant shareholder toward the purchase price on an agreement that was being negotiated with VMI Acquisitions, LLC for purchase of certain of our Company’s assets. The agreement was completed and closed on March 9, 2018.

XML

Notes Payable - Related Party

6 Months Ended

Feb. 28, 2018

Notes Payable - Related Party/Convertible Debenture - Related Party [Abstract]

NOTES PAYABLE - RELATED PARTY

4. NOTES PAYABLE – RELATED PARTY

On April 27, 2016, the Company issued to the Company’s CEO a 7% unsecured promissory note in the amount of $2,500 which matured six months from the date of issuance. On July 5, 2016, the Company issued to the Company’s CEO a 7% unsecured note in the amount of $3,000 which matured six months from date of issuance. On November 17, 2016, the Company repaid the principal amount of the notes, or $5,500. As of February 28. 2018, there is a remaining balance on the note of $50.

On February 14, 2017, the Company issued to Lyle Hauser, the Company’s largest shareholder, a 7% unsecured promissory note in the amount of $30,000 which matured six months from the date of issuance. As of February 28, 2018 the outstanding balance on the note is $30,000

XML

Convertible Debenture - Related Party

6 Months Ended

Feb. 28, 2018

Notes Payable - Related Party/Convertible Debenture - Related Party [Abstract]

CONVERTIBLE DEBENTURE - RELATED PARTY

5. CONVERTIBLE DEBENTURE – RELATED PARTY 

On May 17, 2016, the Company issued to Vantage Group, a significant shareholder, a 7% unsecured promissory note in the amount of $10,000 which had an original maturity of six months from the date of issuance. On August 15, 2016, the Company issued to Vantage Group, a significant shareholder, a 7% unsecured promissory note in the amount of $16,000 which had an original maturity of six months from the date of issuance. On October 27, 2016, the Company issued a significant shareholder a 7% unsecured promissory note in the amount of $10,000 which had an original maturity date of six months from the date of issuance. On November 14, 2016, the Company issued a significant shareholder a 7% unsecured promissory note in the amount of $80,000 which had an original maturity date of six months from the date of issuance. On March 31, 2017, the Company issued a significant shareholder a 7% unsecured promissory note in the amount of $7,000 which had an original maturity date of six months from the date of issuance.

On April 17, 2017 the preceding notes issued to Vantage Group were amended to be convertible into common stock and to mature on April 18, 2018. The convertible notes have a fixed conversion price of $0.008. The amendments to the notes has created a Beneficial Conversion Feature of $123,000 and amortization of the discount of $118,018 during the 6 months ended February 28, 2018. On November 27, 2017, the Company issued an aggregate of 1,450,000 shares of common stock to the holder of a 7% Convertible Promissory Note, dated November 14, 2016 to convert principal amount of $11,600. On November 10, 2017, the Company issued an aggregate of 1,400,000 shares of common stock to the holder of a 7% Convertible Promissory Note, dated November 14, 2016 to convert principal amount of $11,200. On December 28, 2017, the Company issued an aggregate of 1,550,000 shares of common stock to the holder of a 7% Convertible Promissory Note, dated November 14, 2016 to convert principal amount of $12,400. As of February 28, 2018 a total of $35,200 has been converted.

	February 28,  2017
Convertible debenture	$	123,000
Conversion		(35,200	)
Unamortized discount		(4,982	)
Convertible debenture, net of unamortized discount	$	82,818

On April 11, 2017, the Company executed a $540,000 Convertible Debenture with an original issue discount of $180,000. The debenture has a 0% interest rate and a term of two years. In connection with the debenture, the Company issued the lender an aggregate of 2,700,000 shares of common stock and 900,000 common stock purchase warrants. The relative fair value of the stock and warrants aggregating $202,490 was recognized as a discount to the note. Amortization of $64,686 was recognized during the six months ended February 28, 2018. The conversion price of the outstanding balance is the lesser of $3.00 or 40% of the volume weighted average price of the 30 days at date of conversion; not to be less than $1.00. In connection with the debenture the lender is entitled to receive the greater of 5% every dollar raised through financing or every dollar of revenue generated through the earlier of maturity date and repayment of the principal.

	February 28,  2017
Convertible debenture	$	540,000
Unamortized discount		(282,152	)
Convertible debenture, net of unamortized discount	$	257,848

On September 18, 2017, the Company executed, with a related party, an $180,000 Convertible Debenture with an original issue discount of $60,000. The note has a 0% interest rate and a term of two years. In connection with the note, the Company issued the lender an aggregate of 900,000 shares of common stock and 300,000 warrants to purchase common stock. The relative fair value of the stock and warrants aggregating $68,499 was recognized as a discount to the note. Amortization of $13,543 was recognized during the six months ended February 28, 2018. The conversion price of the outstanding balance is the lesser of $3.00 or 40% of the volume weighted average price of the 30 days at date of conversion; not to be less than $1.00. In connection with the debenture the lender is entitled to receive the greater of 5% of every dollar raised through financing or every dollar of revenue generated through the earlier of the maturity date or repayment of the principal.

	February 28,  2017
Convertible debenture	$	180,000
Unamortized discount		(114,955	)
Convertible debenture, net of unamortized discount	$	65,045

On December 13, 2017, the Company executed a $120,000 Convertible Debenture with an original issue discount of $20,000. Amortization of $4,274 was recognized during the six months ended February 28, 2018. The debenture has a 0% interest rate and a term of one year. The conversion price of the outstanding balance is the lesser of $3.00 or 40% of the volume weighted average price of the 30 days at date of conversion; not to be less than $1.00. In connection with the debenture the lender is entitled to receive the greatest of 5% every dollar raised through financing or every dollar of revenue generated through the earlier of maturity date and repayment of the principal.

	February 28,  2017
Convertible debenture	$	120,000
Unamortized discount		(15,726	)
Convertible debenture, net of unamortized discount	$	104,274

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Subsequent Events

6 Months Ended

Feb. 28, 2018

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

6. SUBSEQUENT EVENTS

On March 5, 2018, Bespoke Extracts, Inc. (the “Company”) entered into a securities purchase agreement with an accredited investor. Pursuant to the purchase agreement, upon closing on March 7, 2018, the Company issued and sold to the investor, 3,000,000 shares of common stock for an aggregate purchase price of $300,000. The Company agreed to issue additional shares of common stock (the “Make-Good Shares”) to the investor for no additional consideration, in the event that, during the six month period commencing on the closing date, the Company sells common stock at a purchase price lower than $0.10 (the “Subsequent Financing Price”), such that the total number of shares of common stock received by the investor under the purchase agreement (including the Make-Good Shares and the initial shares) will be equal to the total purchase price of $300,000 divided by such lower Subsequent Financing Price.

On March 9, 2018, the Company issued an aggregate of 1,780,000 shares of common stock to the holder of a 7% Convertible Promissory Note, dated November 14, 2016 to convert principal amount of $14,240.

On March 9, 2018, Bespoke Extracts, Inc. (the “Company”) entered into and closed an asset purchase agreement with VMI Acquisitions, LLC (“VMI”), pursuant to which the Company sold to VMI the Company’s proprietary Machine-to-Machine communications solution and certain other intellectual property for a purchase price of $180,000. $135,000 of the purchase price was paid by members of VMI in cash and had previously been deposited with the Company. The remaining $45,000 of the purchase price was paid in the form of a reduction in outstanding debt and reimbursements of expenses owed to a member of VMI. Certain members of VMI are noteholders and/or shareholders of the Company.

The Company entered into a Management Agreement with Global Corporate Management, LLC. Pursuant to this agreement, the Company to pay $4,000 and to issue 150,000 common stock purchase warrants (exercise price of $0.50, 5 year term, exercisable 6 months after issuance).

The Company entered into a consulting agreement with Patagonia Global Trading, LLC. Upon execution of this agreement and upon the Consultant signing their first customer, acceptable by the Company, and for services rendered, the Company will immediately issue 50,000 common stock purchase warrants to purchase common stock at an exercise price of $.30 per share.

The Company entered into a consulting agreement with Dr. David Hellman for marketing and promotion services. The term is 1 year with payment of 50,000 warrants to purchase common stock with an exercise price of $0.60. However, if the Consultant generates more than $10K in monthly sales, the Warrants will have an exercise price of $.30, and if the Consultant generates more than $20K in monthly sales, the Warrants may be exchanged in "cashless exercise". Additionally, the Company shall pay 10% of retail sales and 5% of wholesale sales.

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Commitments and Contingencies

6 Months Ended

Feb. 28, 2018

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

7. COMMITMENTS AND CONTINGENCIES

The Company entered into a consulting agreement with Optimal Setup LLC for a term of one year to advise the Company on search engine optimization and digital marketing. Optimal Setup LLC shall receive monthly for services performed $2,500 and 10,000 warrants for common stock exercisable for cash price of $0.40. Warrants may be exercised after six month anniversary date.

On January 22, 2018, the Company entered into a Sales Representation Agreement to manage and solicit orders in a set territory, the United States, with an initial term of six months. The sales representative shall be compensated 6% of the net sales and three year warrants monthly to purchase 10,000 shares of common stock at an exercise price of $0.50. Warrants may be exercised after six month anniversary of issuance date.

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Equity (Tables)

6 Months Ended

Feb. 28, 2018

Related Party Transaction [Line Items]

Schedule of share based payment award stock warrants valuation assumptions

	Grant Date	February 28, 2018
Risk-free interest rate at grant date	1.06% - 1.44%	1.06% - 1.49%
Expected stock price volatility	117% - 362%	117% - 362%
Expected dividend payout	-	-
Expected option in life-years	1 - 3 years	1 - 3 years

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Convertible Debenture - Related Party (Tables)

6 Months Ended

Feb. 28, 2018

Notes Payable - Related Party/Convertible Debenture - Related Party [Abstract]

Schedule of convertible debenture net of unamortized discount

	February 28,  2017
Convertible debenture	$	123,000
Conversion		(35,200	)
Unamortized discount		(4,982	)
Convertible debenture, net of unamortized discount	$	82,818

	February 28,  2017
Convertible debenture	$	540,000
Unamortized discount		(282,152	)
Convertible debenture, net of unamortized discount	$	257,848

	February 28,  2017
Convertible debenture	$	180,000
Unamortized discount		(114,955	)
Convertible debenture, net of unamortized discount	$	65,045

	February 28,  2017
Convertible debenture	$	120,000
Unamortized discount		(15,726	)
Convertible debenture, net of unamortized discount	$	104,274

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Basis of Presentation (Details) - USD ($)	3 Months Ended		6 Months Ended
	Feb. 28, 2018	Feb. 28, 2017	Feb. 28, 2018	Feb. 28, 2017	Aug. 31, 2017
Basis of Presentation (Textual)
Net loss	$ (1,727,474)	$ (52,820)	$ (2,897,422)	$ (95,321)
Inventory	69,522		69,522
Finished goods	53,743		53,743
Raw materials	$ 15,779		$ 15,779

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Equity (Details)	6 Months Ended
	Feb. 28, 2018 $ / shares
Class of Warrant or Right [Line Items]
Expected dividend payout
Minimum [Member]
Class of Warrant or Right [Line Items]
Risk-free interest rate at grant date	1.06%
Expected stock price volatility	117.00%
Expected option in life-years	1 year
Maximum [Member]
Class of Warrant or Right [Line Items]
Risk-free interest rate at grant date	1.49%
Expected stock price volatility	362.00%
Expected option in life-years	3 years
Grant Date [Member]
Class of Warrant or Right [Line Items]
Expected dividend payout
Grant Date [Member] | Minimum [Member]
Class of Warrant or Right [Line Items]
Risk-free interest rate at grant date	1.06%
Expected stock price volatility	117.00%
Expected option in life-years	1 year
Grant Date [Member] | Maximum [Member]
Class of Warrant or Right [Line Items]
Risk-free interest rate at grant date	1.44%
Expected stock price volatility	362.00%
Expected option in life-years	3 years

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Equity (Details Textual) - USD ($)			1 Months Ended						6 Months Ended
	Nov. 10, 2017	Apr. 11, 2017	Jan. 22, 2018	Dec. 28, 2017	Nov. 27, 2017	Sep. 22, 2017	Sep. 18, 2017	May 22, 2017	Feb. 28, 2018	Feb. 28, 2017	Feb. 22, 2018	Aug. 31, 2017
Equity (Textual)
Common stock, shares authorized									800,000,000			800,000,000
Common stock, par value									$ 0.001			$ 0.001
Preferred stock, shares authorized									50,000,000			50,000,000
Preferred stock, par value									$ 0.001			$ 0.001
Common stock shares issued in convertible note		2,700,000				900,000	900,000
Principal amount		$ 540,000					$ 180,000
Fair value of amortized discount							51,503
Stock purchase agreement for cash						$ 60,300
Warrant expense
Option expense									$ 579,419
Remains to be expense									$ 484,756
Option service maturity									Jul. 26, 2019
President [Member]
Equity (Textual)
Terms of warrants								3 years
Common stock per share price								$ 0.0001
Fair value of warrants								$ 10,998,105
Warrant to purchase of common stock								20,000,000
Warrant expense									$ 1,818,626
Remains to be expense									8,165,716
Sales Representation Agreement [Member]
Equity (Textual)
Terms of warrants			3 years
Common stock per share price			$ 0.50
Fair value of warrants									60,618
Warrant to purchase of common stock			10,000
Aggregate of shares			60,000
Consulting Agreement [Member]
Equity (Textual)
Common stock per share price											$ 0.40
Fair value of warrants									113,943
Warrant to purchase of common stock											10,000
Aggregate of shares											120,000
7% Convertible Promissory Note [Member] | Convertible Common Stock [Member]
Equity (Textual)
Principal amount	$ 11,200				$ 11,600
Aggregate common stock shares issued	1,400,000				1,450,000
7% Convertible Promissory Note One [Member]
Equity (Textual)
Principal amount	$ 12,400			$ 12,400
Aggregate common stock shares issued	1,550,000			1,550,000
Original issue discount of convertible debt									$ 35,200
Warrant [Member]
Equity (Textual)
Common stock shares issued in convertible note						300,000
Convertible debenture							180,000
Original issue discount of convertible debt							$ 60,000
Debt instrument warrants issued to lender							300,000
Terms of warrants							3 years
Common stock per share price							$ 1.00
Fair value of warrants							$ 16,996

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Asset Purchase Agreement (Details)	Aug. 29, 2017 USD ($)
Asset Purchase Agreement (Textual)
Deposit from a significant shareholder	$ 82,750

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Notes Payable - Related Party (Details) - USD ($)					1 Months Ended				6 Months Ended
	Nov. 17, 2016	Nov. 14, 2016	Aug. 15, 2016	Jul. 05, 2016	Mar. 31, 2017	Feb. 14, 2017	Oct. 27, 2016	Apr. 27, 2016	Feb. 28, 2018
Note Payable - Related Party (Textual)
Outstanding balance on the note									$ 50
7% Unsecured promissory note [Member] | Shareholder [Member]
Note Payable - Related Party (Textual)
Unsecured promissory note issued		$ 80,000	$ 16,000		$ 7,000	$ 30,000	$ 10,000
Unsecured promissory note maturity, description		Maturity date of six months from the date of issuance.	Maturity of six months from the date of issuance.		Maturity date of six months from the date of issuance.	Matured six months from the date of issuance.	Maturity date of six months from the date of issuance.
Outstanding balance on the note									$ 30,000
7% Unsecured promissory note [Member] | CEO [Member]
Note Payable - Related Party (Textual)
Unsecured promissory note issued				$ 3,000				$ 2,500
Repaid of principal amount	$ 5,500
Unsecured promissory note maturity, description				Matured six months from date of issuance.				Matured six months from the date of issuance.

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Convertible Debenture - Related Party (Details)	6 Months Ended
	Feb. 28, 2017 USD ($)
Related party [Member]
Debt Instrument [Line Items]
Convertible debenture	$ 180,000
Unamortized discount	(114,955)
Convertible debenture, net of unamortized discount	65,045
Vantage Group [Member]
Debt Instrument [Line Items]
Convertible debenture	123,000
Conversion	(35,200)
Unamortized discount	(4,982)
Convertible debenture, net of unamortized discount	82,818
Convertible Debenture [Member]
Debt Instrument [Line Items]
Convertible debenture	120,000
Unamortized discount	(15,726)
Convertible debenture, net of unamortized discount	104,274
Convertible Debenture One [Member]
Debt Instrument [Line Items]
Convertible debenture	540,000
Unamortized discount	(282,152)
Convertible debenture, net of unamortized discount	$ 257,848

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Convertible Debenture - Related Party (Details Textual) - USD ($)						1 Months Ended								6 Months Ended
	Dec. 13, 2017	Nov. 10, 2017	Apr. 11, 2017	Nov. 14, 2016	Aug. 15, 2016	Dec. 28, 2017	Nov. 27, 2017	Sep. 18, 2017	Apr. 17, 2017	Mar. 31, 2017	Feb. 14, 2017	Oct. 27, 2016	May 17, 2016	Feb. 28, 2018	Feb. 28, 2017
Convertible Debenture - Related Party (Textual)
Fair value of stock														$ 51,503
Amortization of debt discount														200,521
Principal amount			$ 540,000					$ 180,000
Convertible Debenture one [Member]
Convertible Debenture - Related Party (Textual)
Convertible debenture	$ 120,000
Original issue discount of convertible debt	$ 20,000
Amortization of debt discount														4,274
Debt instrument, description	The conversion price of the outstanding balance is the lesser of $3.00 or 40% of the volume weighted average price of the 30 days at date of conversion; not to be less than $1.00. In connection with the debenture the lender is entitled to receive the greatest of 5% every dollar raised through financing or every dollar of revenue generated through the earlier of maturity date and repayment of the principal.
Vantage Group [Member]
Convertible Debenture - Related Party (Textual)
Convertible debenture															123,000
Original issue discount of convertible debt															35,200
Convertible Debt [Member]
Convertible Debenture - Related Party (Textual)
Unsecured debt, interest rate			0.00%
Convertible debenture			$ 540,000
Original issue discount of convertible debt			$ 180,000
Terms of convertible debt			2 years
Debt instrument warrants issued to lender			900,000
Debt instrument shares issued to lender			2,700,000
Fair value of warrants			$ 202,490
Fair value of stock			$ 202,490
Amortization of debt discount														64,686
Debt instrument, description			The conversion price of the outstanding balance is the lesser of $3.00 or 40% of the volume weighted average price of the 30 days at date of conversion; not to be less than $1.00. In connection with the debenture the lender is entitled to receive the greater of 5% every dollar raised through financing or every dollar of revenue generated through the earlier of maturity date and repayment of the principal.
Convertible Debt [Member] | Convertible common stock [Member]
Convertible Debenture - Related Party (Textual)
Amortization of debt discount														118,018
Conversion price									$ 0.008
Beneficial conversion feature									$ 123,000
Convertible debt maturity date									Apr. 18, 2018
Related party [Member]
Convertible Debenture - Related Party (Textual)
Convertible debenture															$ 180,000
Related party [Member] | Convertible Debt [Member]
Convertible Debenture - Related Party (Textual)
Unsecured debt, interest rate								0.00%
Convertible debenture								$ 180,000
Original issue discount of convertible debt								$ 60,000
Terms of convertible debt								2 years
Debt instrument warrants issued to lender								300,000
Debt instrument shares issued to lender								900,000
Fair value of warrants								$ 68,499
Amortization of debt discount														13,543
Debt instrument, description								The conversion price of the outstanding balance is the lesser of $3.00 or 40% of the volume weighted average price of the 30 days at date of conversion; not to be less than $1.00. In connection with the debenture the lender is entitled to receive the greater of 5% of every dollar raised through financing or every dollar of revenue generated through the earlier of the maturity date or repayment of the principal.
7% Unsecured promissory note [Member] | Vantage Group [Member]
Convertible Debenture - Related Party (Textual)
Unsecured promissory note issued													$ 10,000
Unsecured promissory note maturity, description													Maturity of six months from the date of issuance.
7% Unsecured promissory note [Member] | Convertible common stock [Member]
Convertible Debenture - Related Party (Textual)
Principal amount		$ 11,200					$ 11,600
Aggregate common stock shares issued		1,400,000					1,450,000
7% Unsecured promissory note [Member] | Shareholder [Member]
Convertible Debenture - Related Party (Textual)
Unsecured promissory note issued				$ 80,000	$ 16,000					$ 7,000	$ 30,000	$ 10,000
Unsecured promissory note maturity, description				Maturity date of six months from the date of issuance.	Maturity of six months from the date of issuance.					Maturity date of six months from the date of issuance.	Matured six months from the date of issuance.	Maturity date of six months from the date of issuance.
7% Convertible Promissory Note One [Member]
Convertible Debenture - Related Party (Textual)
Original issue discount of convertible debt														$ 35,200
Principal amount		$ 12,400				$ 12,400
Aggregate common stock shares issued		1,550,000				1,550,000

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Subsequent Events (Details) - USD ($)	Mar. 09, 2018	Mar. 05, 2018	Sep. 18, 2017	Apr. 11, 2017
Subsequent Events (Textual)
Principal amount			$ 180,000	$ 540,000
Subsequent Events [Member]
Subsequent Events (Textual)
Aggregate common stock shares issued	1,780,000	3,000,000
Aggregate purchase price		$ 300,000
Principal amount	$ 14,240
Convertible promissory note percentage	7.00%
Global Corporate Management, LLC [Member] | Subsequent Events [Member]
Subsequent Events (Textual)
Warrants price	$ 4,000
Warrant to purchase of common stock	150,000
Exercise price	$ 0.50
Terms of warrants	5 years
Patagonia Global Trading, LLC [Member] | Subsequent Events [Member]
Subsequent Events (Textual)
Warrant to purchase of common stock	50,000
Exercise price	$ 0.30
Dr. David Hellman [Member] | Subsequent Events [Member]
Subsequent Events (Textual)
Warrant to purchase of common stock	50,000
Exercise price	$ 0.60
Terms of warrants	1 year
Subsequent event, description	The Consultant generates more than $10K in monthly sales, the Warrants will have an exercise price of $.30, and if the Consultant generates more than $20K in monthly sales, the Warrants may be exchanged in "cashless exercise". Additionally, the Company shall pay 10% of retail sales and 5% of wholesale sales.
VMI Acquisitions, LLC [Member] | Subsequent Events [Member]
Subsequent Events (Textual)
Purchase price of intellectual property	$ 135,000
Intellectual Property [Member] | Subsequent Events [Member]
Subsequent Events (Textual)
Reimbursements expenses	45,000
Purchase price of intellectual property	$ 180,000

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Commitments and Contingencies (Details) - USD ($)	1 Months Ended	6 Months Ended
	Jan. 22, 2018	Feb. 28, 2018	Feb. 22, 2018
Sales Representation Agreement [Member]
Commitments and Contingencies [Textual]
Warrant to purchase of common stock	10,000
Common stock per share price	$ 0.50
Percentage of net sales	6.00%
Terms of warrants	3 years
Consulting Agreement [Member]
Commitments and Contingencies [Textual]
Warrant to purchase of common stock			10,000
Common stock per share price			$ 0.40
Consulting Agreement [Member] | Optimal Setup LLC [Member]
Commitments and Contingencies [Textual]
Consulting agreement term		1 year
Monthly services received		$ 2,500
Warrant to purchase of common stock		10,000
Common stock per share price		$ 0.40