RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

12 Months Ended

Aug. 31, 2024

Notes

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

NOTE 14. RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

Certain of the Company’s previously filed annual audited financial statements should no longer be relied upon and a restatement is required for these previously issued financial statements. The Company has restated herein the previously issued financial statements as of and for the year ended August 31, 2023, previously issued on December 7, 2023. The Company has also restated related amounts within the accompanying footnotes to the financial statements to conform to the corrected amounts in the financial statements.

The Company has evaluated and concluded that the misstatement was material to its previously issued financial statements.

Restatement Background

The Company determined several errors within the audited financial statements for the year ending August 31, 2023, including (1) presentational errors connected with convertible loans advanced to the Company with the related party loan amounting to $50,000 including debt discount $1,924 with the minor interest accrual offset; (2) the re-issuance of one share of Preferred Stock Series A to the CEO, which should have been accounted for at the value of the beneficial conversion feature embedded within the stock, resulting in an increase in costs for the year of $1,000,000; and (3) the miscalculation of derivative liabilities embedded within the convertible loan notes, resulting in an increase in costs of change in derivative liability of $303,440, an increase in interest accrual of $18,001, offset by $648 due to a presentational issue, and a decrease in derivative liability of $134,828; this affected a miscalculation of non-cash interest connected with the issuance of the related said convertible loan notes, which resulted in a reduction in costs of $420,268.

Description of Revision Reconciliation Tables

In the following tables, the Company has presented a reconciliation of the previously issued balance sheets from prior periods as previously reported to the restated amounts as of August 31, 2023, as well as the previously issued statements of operations and statements of cash flows from the prior period as previously reported to the revised amounts for the year ended August 31, 2023. The statements of stockholders’ equity for the year ended August 31, 2023 has been revised for the correction to net loss.

	As at August 31, 2023
	Previously Reported		Restated Impacts		Restated Reference		As Restated
ASSETS
Current assets
Cash and cash equivalents	$	344	$	-			$	344
Deposits & prepayments		8,500		-				8,500
Inventory		135,030		-				135,030
Total current assets		143,874		-				143,874
Fixed assets
Property, plant & equipment		8,649		-				8,649
Accumulated depreciation		(3,599)		-				(3,599)
Software		11,900		-				11,900
Other intangible assets		21,000		-				21,000
Accumulated amortization		(3,220)		-				(3,220)
TOTAL ASSETS	$	178,604	$	-			$	178,604
LIABILITIES & STOCKHOLDERS’ DEFICIT
Current liabilities
Accrued expenses	$	10,020	$	18,649		3(b)	$	28,669
Loans & notes payable, short-term or current		137,610		(48,596)		1(a)(b)		89,014
Related party loans and notes payable, short-term or current		3,036		48,076		1(a)		51,112
Derivative liability		384,524		(134,828)		3(a)		249,696
TOTAL LIABILITIES		535,190		(116,699)				418,491
STOCKHOLDERS’ DEFICIT
Convertible preferred shares: par value $0.001, 10,000,000 authorized and 8,999,999 undesignated as at August 31, 2023 and 2022		-		-				-
Series A shares: 1 share designated Series A shares: 1 and nil shares issued and outstanding at August 31, 2023 and 2022, respectively		-		-				-
Series B shares: 1,000,000 shares designated Series B shares: Nil shares issued and outstanding at August 31, 2023 and 2022		-		-				-
Common stock: par value $0.001, 750,000,000 and 300,000,000 authorized and 5,729 and 946 issued and outstanding at August 31, 2023 and 2022, respectively		6		-				6
Additional paid-in capital		30,568,394		1,000,000		2		31,568,394
Accumulated deficit		(30,924,986)		(883,301)				(31,808,287)
TOTAL STOCKHOLDERS’ DEFICIT		(356,586)		116,699				(239,887)
TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT	$	178,604	$	-			$	178,604

	For the year ended August 31, 2023
	Previously Reported		Restated Impacts		Restated Reference		As Restated
Revenues	$	4,224	$	-			$	4,224
Cost of goods sold		21,354		-				21,354
Gross loss		(17,130)		-				(17,130)
Operating expenses
Selling, general & administrative expenses		420,811		128		1(b)		420,939
Depreciation & amortization		5,259		-				5,259
Total operating expenses		426,070		128				426,198
Net operating loss		(443,200)		(128)				(443,328)
Other income (expenses)
Bank charges		(1,555)		-				(1,555)
Bank/loan interest accrued		(18,649)		-				(18,649)
Non-cash interest, convertible loan		(457,801)		420,268		3(b)		(37,533)
Amortization of debt discount		(128,090)		-				(128,090)
Gain (loss) on revaluation of derivative liability		222,277		(303,440)		3(a)		(81,163)
Preferred stock and warrants issued for services		-		(1,000,000)		2		(1,000,000)
Total other income (expenses)		(383,818)		(883,172)				(1,266,990)
Net loss before income taxes	$	(827,018)	$	(883,300)			$	(1,710,318)
Provision for corporation taxes		-		-				-
Net loss	$	(827,018)	$	(883,300)			$	(1,710,318)
Net loss per share	$	(253.14)	$	(327.27)			$	(633.70)
Weighted average shares outstanding		3,267		2,699				2,699

	For the year ended August 31, 2023
	Previously Reported		Restated Impacts		Restated Reference		As Restated
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(827,018)	$	(883,300)			$	(1,710,318)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Depreciation and amortization		5,259		-				5,259
Stock issued for services		-		200,000		4		200,000
Amortization of debt discount		128,090		-				128,090
(Gain) loss on revaluation of derivative liability		(222,277)		303,440		3(a)		81,163
Non-cash interest, convertible loan		457,801		(420,268)		3(b)		37,533
Preferred stock and warrants issued for services		-		1,000,000		2		1,000,000
Changes in operating assets and liabilities:
Accounts payable and other current liabilities		(11,980)		68,649		1(b)		56,669
Inventory		(4,480)		-				(4,480)
Due to related party		-		(8,964)		1(a)4		(8,964)
Other current assets		(8,500)		-				(8,500)
NET CASH (USED IN) OPERATING ACTIVITIES		(483,105)		259,557				(223,548)
CASH FLOWS FROM INVESTING ACTIVITIES
Sale (purchase) of intangible assets		(24,500)		-				(24,500)
NET CASH PROVIDED BY INVESTING ACTIVITIES		(24,500)		-				(24,500)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of equity		287,000		(200,000)		4		87,000
Proceeds from (repayment of) debt instruments		158,521		(68,521)		1(a)4		90,000
Related party loans		(8,964)		8,964		1(a)4		-
NET CASH PROVIDED BY FINANCING ACTIVITIES		436,557		(259,557)				177,000
NET INCREASE (DECREASE) IN CASH		(71,048)		-				(71,048)
Cash, beginning of year		71,392		-				71,392
Cash, end of year	$	344	$	-			$	344
Supplemental schedules of non-cash investing and financing activities
Original debt discount	$	-	$	9,000		5	$	9,000
Initial debt discount and derivative liability created	$	-	$	140,000		5	$	140,000
Related party accrual reclassified into convertible loan	$	-	$	50,000		5	$	50,000
Conversion of debt to equity	$	-	$	-			$	-
Supplemental disclosure of cash flow information
Federal income taxes paid	$	-	$	-			$	-
Interest paid	$	-	$	-			$	-

Note 1. Relates to an error in presentation of the convertible promissory notes, whereby (a) one of the notes was from a related party and should have been presented as such, and (b) interest was miscalculated and included in the convertible loan note balance instead of in accrued expenses. While this has a presentational effect only on the balance sheet and cash flow statement, there is no effect on the income statement.

Note 2. Relates to an error arising from the re-issuance of the one outstanding share of preferred stock series A, whereby such re-issuance was originally at par, but should have been assigned a beneficial conversion feature valuation, which is $1,000,000. The net effect on the originally filed income statement is, therefore, an additional cost of $1,000,000. The net effect on the balance sheet is an increase in stockholders’ deficit of $1,000,000 and an increase in additional paid-in capital of the same amount. There is no net effect on the cash flow statement.

Note 3. Relates to (a) a miscalculation of derivative liability. The revised liability at the year end is $249,696, a reduction of $134,828 from the original amount. The change for the income statement is from a gain of $222,277 to a loss of $81,163, a difference of $303,440. There is no net effect on the cash flow statement; and (b) a miscalculation of non-cash interest. The revised amount is a cost of $37,533 instead of $457,801, a difference of $420,268. There is no net effect on the cash flow statement.

Note 4. An issuance of stock for $200,000, including repayment of debt instruments of $68,521 and related party loans of $8,964, was wrongly stated within Cash Flows from Financing Activities but should have been included in Cash Flows from Operating Activities, and has been corrected.

Note 5. Non-cash activities related disclosures in the Statement of Cash Flows which was missed in prior reporting and is now included.