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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒

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

For the quarterly period ended February 28, 2022.

☐

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 000-27039

CANNABIS GLOBAL, INC.

(Exact name of registrant as specified in its charter)

Nevada		83-1754057
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

520 S. Grand Avenue, Ste. 320
Los Angeles, CA		90071
(Address of principal executive offices)		(Zip Code)

(310) 986-4929

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Exchange on Which Registered
Common	CBGL	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ 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 ST (§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, a smaller reporting company, or an emerging growth company. See 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	☒	Smaller reporting company	☒
Emerging growth company	☒

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). ☐

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 the end of the quarterly reporting period ending February 28, 2022 there were 509,142,691 shares of the registrant's common stock outstanding.

As of April 19, 2022, there were 509,142,691 shares of the registrant’s common stock outstanding, respectively.

CANNABIS GLOBAL, INC.

FORM 10-Q

For the Period Ended February 28, 2022

Table of Contents

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed consolidated balance sheets as of February 28, 2022 (unaudited) and August 31, 2021 (audited)	3
Condensed consolidated statements of operations for the three and six months ended February 28, 2022 and 2021 (unaudited)	4
Condensed consolidated statements of equity for the three and six months ended February 28, 2022 and 2021 (unaudited)	5
Condensed consolidated statements of cash flows for the three and six months ended February 28, 2022 and 2021 (unaudited)	6
Notes to Condensed Consolidated Financial Statements (unaudited)	7

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	30

Item 4. Controls and Procedures	39

*PART II OTHER INFORMATION*

Item 1. Legal Proceedings	40

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	40

Item 3. Defaults Upon Senior Securities	40

Item 4. Mine Safety Disclosures	40

Item 5. Other Information	40

Item 6. Exhibits	41

Signatures	42

ITEM I — FINANCIAL STATEMENTS

CANNABIS GLOBAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Unaudited)



	February 28,			August 31,
	2022			2021

ASSETS
Current Assets:
Cash	$	604,001		$	30,813
Accounts Receivable		451,577			113,379
Notes Receivable, Current		21,000			100,800
Inventory		195,548			189,081
Other Current Asset		10,496			7,992
Total Current Asset		1,282,622			442,065

Machinery & Equipment- Net		1,015,545			218,535

Other Assets
Long-Term Investments		407,000			650,000
Intangible Assets		3,870,000			500,000
Right of Use Asset		599,767			634,637
Goodwill		7,925,000			8,842,967
Notes Receivable		41,000			41,000
Security Deposit		7,200			9,600

TOTAL ASSETS	$	15,148,134		$	11,338,804
LIABILITIES & STOCKHOLDER'S EQUITY (DEFICIT)
Current Liabilities:
Accounts Payable	$	744,397		$	730,825
Accounts Payable - Related Party		2,639			2,639
Accrued Interest		147,106			212,202
Due to Joint Venture		—			135,000
Notes Payable, Current		890,441			975,043
Right of Use Liability, Current		75,417			71,754
Convertible Notes, Net of Debt Discount of $821,015 and $734,579, respectively		748,815			1,206,708
Convertible Notes – Related Party, Net of Debt Discount of $124,164 and $721,393, respectively		1,129,992			408,607
Series B Convertible Preferred Stock, 1,000,000 shares authorized, 277,750 and 367,750 shares issued and outstanding		172,392			148,775
Derivative Liability		1,942,485			4,747,614
Notes Payable - Related Party		108,039			108,039
Total Current Liabilities		5,961,723			8,747,206
Right of Use Liability, Long-Term		524,350			562,997
Notes Payable		731,025			672,794
Total Liabilities		7,217,098			9,982,997

Stockholder's Equity
Preferred Stock, par value $0.0001, 10,000,000 shares Authorized, 6,000,000 shares Issued and Outstanding at February 28, 2022 and August 31, 2021		600			600
Common Stock, par value $0.001, 3,000,000,000 shares Authorized, 509,142,691 shares Issued and Outstanding at February 28, 2022 and 84,940,028 at August 31, 2021, respectively		509,141			84,938
Additional Paid-in Capital		16,995,195			11,591,829
Shares to be issued		2,078			2,078
Accumulated Deficit		(14,015,507	)		(13,891,788	)

Total Stockholder's Equity (Deficit) Attributable to Cannabis Global, Inc.		3,491,507			(2,212,343	)

Noncontrolling Interest		4,439,529			3,568,150
Total Stockholder's Equity		7,931,036			1,355,807
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY	$	15,148,134		$	11,338,804

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

CANNABIS GLOBAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited)



	For the Three Months Ended						For the Six Months Ended
	February 28,			February 28,			February 28,			February 28,
	2022			2021			2022			2021

Revenue:
Products Sales	$	627,390		$	25,816		$	1,196,952		$	30,226
Total Revenue		627,390			25,816			1,196,952			30,226

Cost of Goods Sold		767,896			6,653			1,223,864			7,953
Gross Profit		(140,506	)		19,163			(26,912	)		22,273

Operating Expenses:
Advertising Expenses		14,644			(498	)		23,963			50,524
Consulting Services		6,500			20,750			6,500			252,051
Professional Fees		122,337			129,263			271,074			179,895
General and Administrative Expenses		794,743			282,056			971,527			396,492
Total Operating Expenses		938,224			431,571			1,273,064			878,962

Operating Loss		(1,078,730	)		(412,408	)		(1,299,976	)		(856,689	)

Other Income (Expense)
Interest Expense		(2,487,747	)		(1,933,728	)		(3,743,233	)		(2,706,483	)
Changes in FV of Derivatives		1,715,626			593,235			3,488,560			1,308,912
Other Income		—			1,522			—			1,642
Loss on impairment		(60,000	)		—			(60,000	)		—
Loss on settlement		(165,000	)		—			(165,000	)		—
Gain (loss) on investment		(10,909	)		—			60,967			—
Gain on acquisition		454,768			—			454,768			—
Equity method income (loss)		934,867			(359,391	)		934,867			(211,376	)
Total Other Income (Expense)		381,605			(1,698,362	)		970,929			(1,607,305	)

Net Loss		(697,125	)		(2,100,770	)		(329,047	)		(2,463,994	)

Net income attributable to noncontrolling interest		193,701			—			205,328			—

Net loss attributable to Cannabis Global, Inc.	$	(503,424	)	$	(2,110,770	)	$	(123,719	)	$	(2,463,994	)

Basic Loss per Common Share	$	(0.00	)	$	(0.05	)	$	(0.00	)	$	(0.06	)
Diluted Loss per Common Share	$	(0.00	)	$	(0.05	)	$	(0.00	)	$	(0.06	)

Weighted Average Common Shares
Outstanding - Basic		271,165,969			43,196,439			233,056,112			39,744,494
Weighted Average Common Shares
Outstanding - Diluted		271,165,969			43,196,439			233,056,112			39,744,494

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

CANNABIS GLOBAL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2022 AND 2021



	Class A Preferred Stock				Common Stock				Common Stock to be issued						Additional Paid In			Accumulated			Stockholders' Equity Attributable to Cannabis			Noncontrolling		Total Stockholders'
	Shares		Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Global Inc.			Interest		Equity

Balance, August 31,2020		6,000,000		600		27,082,419		2,708		1,871,858		$	187		$	4,618,168		$	(6,056,949	)	$	(1,435,286	)	$	—	$	(1,435,286	)
Stock based compensation		—		—		3,400,000		3,400		—			—			179,600			—			183,000			—		183,000
Proceeds from common stock subscriptions		—		—		510,204		510		89,796			90			(600	)		—			—			—		—
Common stock issued for investment		—		—		7,222,222		7,222		—			—			642,778			—			650,000			—		650,000
Common stock issued in settlement of convertible notes payable and accrued interest		—		—		1,500,000		1,500		—			—			28,500			—			30,000			—		30,000
Effects of Par value adjustment		—		—		—		24,372		—			1,683			(26,055	)		—			—			—		—
Net Loss		—		—		—		—		—			—			—			(353,224	)		(353,224	)		—		(353,224	)
Balance, November 30, 2020		6,000,000		600		39,714,845		39,712		1,961,654			1,960			5,442,391			(6,410,173	)		(925,510	)		—		(925,510	)

Stock based compensation		—		—		4,106,543		4,107		(600,000	)		(600	)		335,827			—			339,334			—		339,334
Proceeds from common stock subscriptions		—		—		6,516,667		6,517		—			—			384,483			—			391,000			—		391,000
Common stock issued for investment		—		—		12,820,297		12,820		—			—			2,209,355			—			2,222,175			3,849,293		6,071,468
Common stock issued in settlement of convertible notes payable and accrued interest		—		—		3,047,335		3,047		—			—			213,682			—			216,729			—		216,729
Derivative impact of conversions		—		—		—		—		—			—			276,975			—			276,975			—		276,975
Net Loss		—		—		—		—		—			—			—			(2,110,770	)		(2,110,770	)		—		(2,110,770	)
Balance, February 28, 2021		6,000,000		600		66,205,687		66,203		1,361,654			1,360			8,862,713		$	(8,520,943	)		409,933			3,849,293		4,259,226

Balance, August 31, 2021	6,000,000	$	600	84,940,028	$	84,938	2,079,654	$	2,078	$	11,591,829		$	(13,891,788	)	$	(2,212,343	)	$	3,568,150		$	1,355,807
Stock based compensation	—		—	3,326,790		3,327	—		—		86,047			—			89,374			—			89,374
Common stock issued in settlement of convertible notes payable and accrued interest	—		—	124,187,672		124,188	—		—		933,554			—			1,057,742			—			1,057,742
Derivative impact of conversions	—		—	—		—	—		—		1,273,832			—			1,273,832			—			1,273,832
Net Income (Loss)	—		—	—		—	—		—		—			379,705			379,705			(11,627	)		368,078
Balance, November 30, 2021	6,000,000		600	212,454,490		212,453	2,079,654		2,078		13,885,262			(13,512,083	)		588,310			3,556,523			4,144,833

Common stock issued in settlement of convertible notes payable and accrued interest	—		—	195,388,201		195,388	—		—		371,671			—			567,059			—			567,059
Common stock issued related to joint venture	—		—	75,000,000		75,000	—		—		225,000			—			300,000			—			300,000
Discount on convertible notes	—		—	3,000,000		3,000	—		—		22,200			—			25,200			—			25,200
Common stock issued in exchange for exercise of warrants on a cashless basis	—		—	23,300,000		23,300	—		—		(23,300	)		—			—			—			—
Derivative impact of conversions	—		—	—		—	—		—		785,109			—			785,109			—			785,109
Acquisition measurement period adjustment	—		—	—		—	—		—		1,729,253			—			1,729,253			1,076,707			2,805,960
Net Loss	—		—	—		—	—		—		—			(503,424	)		(503,424	)		(193,701	)		(697,125	)
Balance, February 28, 2022	6,000,000	$	600	509,142,691	$	509,141	2,079,654	$	2,078	$	16,995,195		$	(14,015,507	)	$	3,491,507		$	4,439,529		$	7,931,036

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

CANNABIS GLOBAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)



	For the Six Months Ended
	February 28,			February 28,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:

Net Loss		(329,047	)		(2,463,994	)
Adjustments to reconcile net loss to net cash used in operating activities:

Non-Cash Interest Expense		3,443,624			2,342,280
Realized Gain on Investments		(60,967	)		—
Joint venture settlement		165,000			—
Impairment loss		60,000			—
Gain on acquisition accounting		(454,768	)		—
Equity Method (Income) Loss From Investments		(934,868	)		211,376
Depreciation Expense		892,955			1,798
Stock Based Compensation		89,374			522,334
Changes in Fair Value of Derivative Liabilities		(3,488,560	)		(1,308,912	)
Right of Use Asset Amortization		34,870			—
Changes In:
Accounts Receivable		(338,198	)		(24,767	)
Other Current Assets		(2,504	)		—
Inventory		166,033			(104,817	)
Other Asset		82,200			—
Accounts Payable and Accrued Expenses		65,896			(61,053	)
Accrued Interest		190,227			111,311
Right of Use Lease Liability		(34,984	)		—
Net Cash Used in Operating Activities		(453,717	)		(774,444	)

CASH FLOWS FROM INVESTING ACTIVITIES
Cash acquired in acquisition		—			2,200
Purchase of property, plant and equipment		(6,402	)		—
Sale of Marketable Securities		303,967			—
Net Cash Provided by Investing Activities		297,565			2,200

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Convertible Debentures		1,065,320			1,086,000
Proceeds from issuance of common stock		—			391,000
Repayment of Convertible Notes Payable		(137,109	)		(578,000	)
Repayment of Convertible Notes Payable		45,000			5,093
Repayment of Notes Payable		(243,871	)		—
Net Cash Provided by Financing Activities		729,340			904,093

Net Increase in Cash		573,188			131,849
Cash at Beginning of Period		30,813			2,338

Cash at End of Period	$	604,001		$	134,187

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest	$	81,838		$	188,292
Taxes	$	—		$	—

Shares issued and loan incurred for acquisition of intangible assets	$	—		$	650,000
Inventory acquired with short term note payable	$	172,500		$	—
Shares issued for Conversion of Notes Payable and Accrued Interest	$	1,357,742		$	246,729
Common stock issued for acquisition of NPE	$	—		$	2,222,175
Increase in noncontrolling interest from acquisition of NPE	$	—		$	3,849,293
Common stock issued related to joint venture	$	300,000		$	—
Discount on convertible notes	$	25,200		$	—
Acquisition measurement period adjustment	$	2,805,960		$	—

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

CANNABIS GLOBAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

February 28, 2022

(Unaudited)

Note 1. Organization and Description of Business

Cannabis Global, Inc. is located at 520 S. Grand Avenue, Suite 320, Los Angeles, California 90071. Our telephone number is (310) 986-4929 and our website is accessible at www.cannabisglobalinc.com. Our shares of Common Stock are quoted on the OTC Markets Pink Tier, operated by OTC Markets Group, Inc., under the ticker symbol “CBGL.”

Historical Development

We incorporated in Nevada in 2005 under the name MultiChannel Technologies Corporation, a wholly owned subsidiary of Octillion Corporation, a development stage technology company focused on the identification, acquisition and development of emerging solar energy and solar related technologies. In April, 2005, we changed our name to MicroChannel Technologies, Inc., and in June, 2008, began trading on the OTC Markets under the trading symbol “MCTC.” Our business focused on research and development of a patented intellectual properties combining physical, chemical, and biological cues at the “cellular” level to facilitate peripheral nerve regeneration.

On June 27, 2018, we changed domiciles from the State of Nevada to the State of Delaware, and thereafter reorganized under the Delaware Holding Company Statute. On or about July 12, 2018, we formed two subsidiaries for the purpose of effecting the reorganization. We incorporated MCTC Holdings, Inc. and MCTC Holdings Inc. incorporated MicroChannel Corp. We then effected a merger involving the three constituent entities, and under the terms of the merger we were merged into MicroChannel Corp., with MicroChannel Corp. surviving and our separate corporate existence ceasing. Following the merger, MCTC Holdings, Inc. became the surviving publicly traded issuer, and all of our assets and liabilities were merged into MCTC Holdings, Inc.’s wholly owned subsidiary MicroChannel Corp. Our shareholders became the shareholders of MCTC Holdings, Inc. on a one for one basis.

On May 25, 2019, Lauderdale Holdings, LLC, a Florida limited liability company, and beneficial owner 70.7% of our issued and outstanding common stock, sold 130,000,000 common shares, to Mr. Robert Hymers, Mr. Edward Manolos and Mr. Dan Nguyen, all of whom were previously unaffiliated parties of the Company. Each individual purchased 43,333,333 common shares for $108,333 or an aggregate of $325,000. These series of transactions constituted a change in control.

On August 9, 2019, we filed a DBA in California registering the operating name Cannabis Global. On July 1, 2019, the Company entered into a 100% business acquisition with Action Nutraceuticals, Inc., a company owned by our CEO, Arman Tabatabaei in exchange for $1,000 (see “Related Party Transactions”).

Effective as of September 30, 2019, we affected a reverse split of our common shares effective as at the rate of 1:15.

On September 11, 2019, we formed a subsidiary Aidan & Co, Inc. (“Aidan”) a California corporation as a wholly owned subsidiary of the Company. Aidan will be engaged in various related business opportunities. At this time Aidan has no operations.

On December 4, 2019, our shareholders approved and authorized (i) re-domiciling the Company from Delaware to Nevada; (ii) changing the name of the Company from MCTC Holdings, Inc. to Cannabis Global, Inc.; and, (iii) seeking a corresponding change of name and new trading symbol for the Company with FINRA.

On March 30, 2020, we filed Articles of Conversion with the Delaware Secretary of State, electing to convert and re-domicile the Company from a Delaware corporation to a newly formed Nevada corporation named Cannabis Global, Inc. Concurrently, the Registrant filed Articles of Incorporation and Articles of Domestication with the Nevada Secretary of State incorporating the Registrant in Nevada under the name Cannabis Global, Inc. and accepting the re-domicile of Registrant’s Delaware corporation. There was no change to the Registrant’s fiscal year end. As a result of our FINRA corporate action, our name was changed to Cannabis Global, Inc. and our trading symbol changed to “CBGL.”

On April 18, 2020, we formed a subsidiary Hemp You Can Feel, Inc., a California corporation (“HYCF”), as a wholly owned subsidiary of the Company. HYCF will be engaged in various related business opportunities. At this time HYCF has no operations.

On May 6, 2020, we signed a joint venture agreement with RxLeaf, Inc. (“RxLeaf”) a Delaware corporation, creating a joint venture for the purpose of marketing the Company’s products to consumers. Under the terms of the agreement, the Company will produce products, which will be sold by RX Leaf via its digital marketing assets. The Company agreed to share the profits from the joint venture on a 50/50 basis. As of the date of this filing, the joint venture has no operations.

On July 22, 2020, we signed a management agreement with Whisper Weed, Inc., a California corporation (“Whisper Weed”). Edward Manolos, our director, is a shareholder in Whisper Weed (see “Related Party Transactions”). Whisper Weed conducts licensed delivery of cannabis products in California. The material definitive agreement requires the parties to create a separate entity, CGI Whisper W, Inc. in California as a wholly owned subsidiary of the Company. The business of CGI Whisper W, Inc. will be to provide management services for the lawful delivery of cannabis in the State of California. The Company will manage CGI Whisper W, Inc. operations. In exchange for the Company providing management services to Whisper Weed through the auspices of CGI Whisper W, Inc., the Company will receive as consideration a quarterly fee of 51% of the net profits earned by Whisper Weed. As separate consideration for the transaction, the Company agreed to issue to Whisper Weed $150,000 in the Company’s restricted common stock, valued for purposes of issuance based on the average closing price of the Company’s common stock for the twenty days preceding the entry into the material definitive agreement. Additionally, the Company agreed to amend its articles of incorporation to designate a new class of preferred shares. The preferred class will be designated and issued to Whisper Weed in an amount equal to two times the quarterly payment made to the Company. The preferred shares will be convertible into the Company’s common stock after 6 months, and shall be senior to other debts of the Company. The conversion to common stock will be based on a value of common stock equal to at least two times the actual sales for the previous 90 day period The Company agreed to include in the designation the obligation to make a single dividend payment to Whisper Weed equal to 90% of the initial quarterly net profits payable by Whisper Weed. As of the date of this filing, the Company has not issued the common or preferred shares, and the business is in the development stage.

On August 31, 2020, we entered into a stock purchase agreement with Robert L. Hymers III (“Hymers”). Pursuant to the Stock Purchase Agreement, the Company purchased from Hymers 266,667 shares of common stock of Natural Plant Extract of California Inc., a private California corporation (“NPE”), in exchange for $2,040,000. The purchased shares of common stock represent 18.8% of the outstanding capital stock of NPE on a fully diluted basis. NPE operates a licensed psychoactive cannabis manufacturing and distribution business operation in Lynwood, California. In connection with the stock purchase agreement, we became a party to a Shareholders Agreement, dated June 5, 2020, by and among Alan Tsai, Hymers, Betterworld Ventures, LLC, Marijuana Company of America, Inc. and NPE. The Shareholders Agreement contains customary rights and obligations, including restrictions on the transfer of the Shares. On June 11, 2021, the Company and Hymers amended the stock purchase agreement to exchange the Registrant’s obligations to make monthly payments, for our issuance of a Convertible Note for the same amount, with principal and interest due on June 11, 2022. The Convertible Note also provides Hymers with the right to convert outstanding principal and interest into our common stock at a fixed price of $0.04 per share, unless, at the time the amounts due under this Note are eligible for conversion, the Securities and Exchange Commission has not enacted any amendment to the provisions of Rule 144(d)(iii) or other provision in a manner that would adversely affect the tacking of variable rate securities. In such event the Conversion Price shall equal 60% of the lowest trading price of the Company’s Common Stock for the 10 trading days immediately preceding the delivery of a Notice of Conversion to the Company. The Company also agreed, in the event that it determined to prepare and file a registration statement concerning its common stock, to include all the shares issuable upon conversion of this Note.

On September 30, 2020, the Company entered into a securities exchange agreement with Marijuana Company of America, Inc., a Utah corporation (“MCOA”). By virtue of the agreement, the Company issued 7,222,222 shares of its unregistered common stock to MCOA in exchange for 650,000,000 shares of MCOA unregistered common stock. The Company and MCOA also entered into a lock up leak out agreement which prevents either party from sales of the exchanged shares for a period of 12 months. Thereafter the parties may sell not more than the quantity of shares equaling an aggregate maximum sale value of $20,000 per week, or $80,000 per month until all Shares and Exchange Shares are sold. On June 9, 2021, the parties amended their securities exchange agreement to delete the lock up leak out agreement, and the requirement to conduct quarterly reviews of each party’s respective stock price for purposes of evaluating whether additional share issuances are required to maintain the value of exchanged common shares equal to $650,000. As consideration for the amendment, we issued MCOA 618,000 shares of restricted common stock. We issued the common stock pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, available to the Company by Section 4(a)(2) promulgated thereunder due to the fact that it was an isolated issuance and did not involve a public offering of securities. During the six months ended February 28, 2022, the Company sold a total of 243,000,000 shares of common stock of MCOA for cash proceeds of $303,967 and recognized a gain on sale of investment $60,967.

On November 16, 2020, we entered into a business acquisition agreement with Ethos Technology LLC, dba Comply Bag, a California limited liability company (“Ethos”). Ethos is a business in the market for cannabis trackable storage bags. By virtue of the agreement, Ethos sold, assigned, and transferred to the Company all of Ethos’ business, including all of its assets and associated liabilities, in exchange for the Company’s issuance of an aggregate of 6,000,000 common shares. 3,000,000 shares were due at signing, with 1,500,000 shares being issued to Edward Manolos, and 1,500,000 shares being issued to Thang Nguyen. Mr. Manolos is our director and a related party. Mr. Nguyen is the brother of Dan Van Nguyen, our director, and a related party. After Ethos ships orders for Ethos products equaling $1,000,000 to unaffiliated parties, the Company will issue to Messrs. Manolos and Nguyen an additional 1,500,000 shares of common stock each. At the closing we sold an aggregate 3,000,000 shares of Company common stock, par value $0.001, equal in value to $177,000 based on closing price on November 16, 2020. Of the total sold, 1,500,000 shares of common stock were sold to Edward Manolos and 1,500,000 shares of common stock were sold to Thang Nguyen. We issued the above shares of its common stock pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, available to the Company by Section 4(a)(2) promulgated thereunder due to the fact that it was an isolated issuance and did not involve a public offering of securities.

On January 27, 2021, we closed a material definitive agreement (MDA) with Edward Manolos, our director and related party. Pursuant to the MDA, the Company purchased from Mr. Manolos 266,667 shares of common stock in Natural Plant Extract of California Inc., a California corporation (“NPE”), representing 18.8% of the outstanding capital stock of NPE on a fully diluted basis. NPE operates a licensed psychoactive cannabis manufacturing and distribution business operation in Lynwood, California. NPE is a privately held corporation. Under the terms of the MDA, we acquired all beneficial ownership over the NPE shares in exchange for a purchase price of two million forty thousand dollars ($2,040,000). In lieu of a cash payment, we agreed to issue Mr. Manolos 11,383,929 restricted common shares, valued for purposes of the MDA at $0.1792 per share. In connection with the MDA, we became a party to a Shareholders Agreement by and among Alan Tsai, Hymers, Betterworld Ventures, LLC, Marijuana Company of America, Inc. and NPE. The Shareholders Agreement contains customary rights and obligations, including restrictions on the transfer of the Shares. Mr. Manolos is our director as well as a directly of Marijuana Company of America and is therefore a related party.

On February 16, 2021, we purchased 266,667 shares of common stock of Natural Plant Extract of California Inc., a California corporation (“NPE”), from Alan Tsai, in exchange for the issuance of 1,436,368 common shares. Other than with respect to the transaction, there was no material relationship between Mr. Tsai and the Registrant. By virtue of the transaction, the Registrant acquired 18.8% of the outstanding capital stock of NPE, bringing its total beneficial ownership in NPE to 56.5%. NPE operates a licensed psychoactive cannabis manufacturing and distribution business operation in Lynwood, California. By virtue of its 56.5% ownership over NPE, the Company will control production, manufacturing, and distribution of both NPE and Company products. In connection with the MDA, the Registrant became a party to a Shareholders Agreement by and among Edward Manolos, a director of the Company, Robert L. Hymers III, Betterworld Ventures, LLC, Marijuana Company of America, Inc. and NPE. The Shareholders Agreement contains customary rights and obligations concerning operations, management, including restrictions on the transfer of the Shares.

On May 12, 2021, The Company and Marijuana Company of America (MCOA) agreed to operate a joint venture through a new Nevada corporation named MCOA Lynwood Services, Inc. The parties agreed to finance a regulated and licensed laboratory to produce various cannabis products under the legal framework outlined by the City of Lynwood, California, Los Angeles County, and the State of California. We own a controlling interest in Natural Plant Extract of California, Inc., which operates a licensed cannabis manufacturing operation in Lynwood, California. As its contribution the joint venture, MCOA agreed to purchase and install equipment for joint venture operations, which will then be rented to the joint venture, and also provide funding relating to marketing the products produced by the capital equipment. We agreed to provide use of our manufacturing and distribution licenses; access to the Lynwood, California facility; use of the specific areas within the Lynwood Facility suitable for the types of manufacturing selected by the joint venture; and, management expertise require to carry on the joint venture’s operations. Our ownership of the joint venture was agreed to be 60% and 40% with MCOA. Royalties from profits realized as the result of sales of products from the joint venture were also agreed to be distributed as 60% to us and 40% to MCOA. MCOA contributed $135,000 of cash to the joint venture for its operations. On January 26, 2022, the Company entered into a partial settlement agreement amendment to joint venture agreement with MCOA. Per the agreement, the Company issued 75,000,000 shares valued to settle the $135,000 contributed by MCOA. As a result, the Company recorded a $165,000 loss on settlement of joint venture. As of the date of this filing, the joint venture is in the development stage.

Current Business Operations

Cannabis Global manufactures and distributes various cannabis products via its majority ownership of Natural Plant Extract, Inc., sells the Ethos Comply Bag, and generally conducts research and development in the areas of hemp, cannabis and consumer food goods.

We recently announced our acquisition of a 56.5%, controlling interest in Natural Plant Extract (NPE), which operates a licensed cannabis manufacturing and distribution business in Lynwood, California, holding a Type 7 California Manufacturing and a distribution license, allowing for cannabis product distribution anywhere in the state. We plan to use the Lynwood NPE operation, combined with our internally developed technologies, as a testbed to launch multi-state operations as soon as possible if cannabis is removed as a Scheduled substance from the federal Controlled Substances Act (“CSA”), and interstate commerce in cannabis is approved by the federal government. As of the date of this filing, cannabis remains a Schedule 1 controlled substance and so illegal under the CSA.

Our operations at the Natural Plant Extract facility emphasizes regulated cannabis product manufacturing and distribution. In addition to business opportunities available from regulated cannabis product manufacturing and distribution to all parts of the State of California, we also see strong synergies between NPE operations and sales of our Ethos technology Comply Bag, and our developing technologies including the areas of cannabis infusions, and all-natural polymeric nanoparticle technologies.

We also have an active research and development program primarily focused on creating and commercializing engineered technologies that deliver hemp extracts and cannabinoids to the human body. Additionally, we invest, or provide managerial services, in specialized areas of the regulated hemp and cannabis industries. Thus far, the Company has filed six provisional patents, three non-provisional patents and recently announced its "Comply Bag" secure cannabis transport system with integrated track and trace capabilities via smartphones, which is available for purchase now.

On April 9, 2021, we entered into a distribution agreement with Lynwood Roads Delivery, LLC (“LDR”). LRD owns a regulatory permit issued by the City of Lynwood permitting commercial retailer non-storefront operation in Lynwood, California. Under the terms of the agreement, the Company’s majority owned subsidiary, Natural Plant Extract of California, via is licensed Northern Lights Distribution, Inc. operation will distribute selected products for LDR.

On April 21, 2021, The Company began taking orders for its new product lines produced at the NPE facility, completing its initial product development phase.

On May 12, 2021, we entered into an agreement to operate a joint venture through a new Nevada corporation named MCOA Lynwood Services, Inc. The parties agreed to finance a regulated and licensed laboratory to produce various cannabis products under the legal framework outlined by the City of Lynwood, California, Los Angeles County, and the State of California. The Registrant owns a controlling interest in Natural Plant Extract of California, Inc., which operates a licensed cannabis manufacturing operation in Lynwood, California. As its contribution the joint venture, MCOA agreed to purchase and install equipment for joint venture operations, which will then be rented to the joint venture, and also provide funding relating to marketing the products produced by the capital equipment. We agreed to provide use of NPE’s manufacturing and distribution licenses; access to its Lynwood, California facility; use of the specific areas within the Lynwood Facility suitable for the types of manufacturing selected by the joint venture; and, management expertise require to carry on the joint venture’s operations. Ownership of the joint venture was agreed to be 60% in us and 40% with MCOA. Royalties from profits realized as the result of sales of products from the joint venture was also agreed to be distributed as 60% to us and 40% to MCOA. Development of the joint venture is ongoing and is considered in the development stage. On January 26, 2022, the Company and MCOA entered into a settlement agreement, whereby the Company agreed to issue MCOA 75,000,000 shares of common stock. As of the date of this filing, the joint venture is in the development stage.

Our research and development programs included the following:

1.	Development of new routes and vehicles for hemp extract and cannabinoid delivery to the human body.

2.	Production of unique polymeric nanoparticles and fibers for use in oral and dermal cannabinoid delivery.

3.	Research and commercialization of new methodologies to isolate and/or concentrate various cannabinoids and other substances that comprise industrial hemp oil and other extracts.

4.	Establishment of new methods to increase the bioavailability of cannabinoids to the human body utilizing nanoparticles and other proven bioenhancers, including naturally occurring and insect produced glycosides.

5.	Development of other novel inventions for the delivery of cannabinoids to the human body, which at this time are considered trade secrets by the Company.

Note 2. Going Concern Uncertainties

During this financial reporting period, the Company reported revenues representing a significant historical increase over previous fiscal periods which we do not consider nominal as compared to previously disclosed revenues. Although our revenues are now growing, we are still not generating positive operational cash flow.

The Company has an accumulated deficit of $14,015,507 as of February 28, 2022, and the Company had a net loss of $329,047 and used cash in operations of $453,717. The Company expects to incur additional losses as it executes its business strategy in the cannabis and cannabinoid marketplaces. The Company will be subject to the risks, uncertainties, and difficulties frequently encountered by early-stage companies. The Company may not be able to successfully address any or all of these risks and uncertainties. Failure to adequately do so could cause the Company’s business, results of operations, and financial condition to suffer. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance date of these financial statements.

The Company’s ability to continue as a going concern is an issue due to its net losses and negative cash flows from operations, and its need for additional financing to fund future operations. Management plans to obtain necessary funding from outside sources and through the sales of Company shares. There can be no assurance that such funds, if available, can be obtained on terms reasonable to the Company. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern and do not include any adjustments that may result from the outcome of this uncertainty.

Based on the Company’s current level of expenditures, management believes that cash on hand is not adequate to fund operations for the next twelve months. Management of the Company is estimating approximately $2,500,000 will be required over the next twelve months to fully execute its business strategy. These can be no assurance the Company will be able to obtain such funds.

Note 3. Summary of Significant Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the amounts reported in those statements. We have made our best estimates of certain amounts contained in our consolidated financial statements. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities. However, application of our accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties, and, as a result, actual results could differ materially from these estimates. Management believes that the estimates, assumptions, and judgments involved in the accounting policies described below have the most significant impact on our consolidated financial statements.

We cannot predict what future laws and regulations might be passed that could have a material effect on our results of operations. We assess the impact of significant changes in laws and regulations on a regular basis and update the assumptions and estimates used to prepare our financial statements when we deem it necessary.

Derivative Instruments

The fair value of derivative instruments is recorded and shown separately under current liabilities. Changes in the fair value of derivatives liability are recorded in the consolidated statement of operations under non-operating income (expense).

We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, we use a weighted average Binomial option-pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

Consolidation

The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and NPE, in which the Company controls 56.4% of the common stock. All intercompany balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

We consider all highly liquid investments with original maturities of three months or less to be cash equivalents. Cash and cash equivalents are held in operating accounts at a major financial institution.

Inventory

Inventory is primarily comprised of work in progress. Inventory is valued at cost, based on the specific identification method, unless and until the market value for the inventory is lower than cost, in which case an allowance is established to reduce the valuation to market value. As of February 28, 2022, and August 31, 2021, market values of all of our inventory were at cost, and accordingly, no such valuation allowance was recognized.

Deposits

Deposits is comprised of advance payments made to third parties, primarily for inventory for which we have not yet taken title. When we take title to inventory for which deposits are made, the related amount is classified as inventory, then recognized as a cost of revenues upon sale (see “Costs of Revenues” below). There were no deposits as of February 28, 2022.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets is primarily comprised of advance payments made to third parties for independent contractors’ services or other general expenses. Prepaid services and general expenses are amortized over the applicable periods, which approximate the life of the contract or service period.

Accounts Receivable

Accounts receivables are recorded at the net value of face amount less any allowance for doubtful accounts. On a periodic basis, we evaluate our accounts receivable and, based on a method of specific identification of any accounts receivable for which we deem the net realizable value to be less than the gross amount of accounts receivable recorded, we establish an allowance for doubtful accounts for those balances. In determining our need for an allowance for doubtful accounts, we consider historical experience, analysis of past due amounts, client creditworthiness and any other relevant available information. However, our actual experience may vary from our estimates. If the financial condition of our clients were to deteriorate, resulting in their inability or unwillingness to pay our fees, we may need to record additional allowances or write-offs in future periods. This risk is mitigated to the extent that we collect retainers from our clients prior to performing significant services.

The allowance for doubtful accounts, if any, is recorded as a reduction in revenue to the extent the provision relates to fee adjustments and other discretionary pricing adjustments. To the extent the provision relates to a client's inability to make required payments on accounts receivables, the provision is recorded in operating expenses. As of February 28, 2022, and August 31, 2021, we had $0 allowance for doubtful accounts.

Property and Equipment, net

Property and Equipment is stated at net book value, cost less depreciation. Maintenance and repairs are expensed as incurred. Depreciation of owned equipment is provided using the straight-line method over the estimated useful lives of the assets, ranging from two to seven years. Depreciation of capitalized construction in progress costs, a component of property and equipment, net, begins once the underlying asset is placed into service and is recognized over the estimated useful life. Property and equipment are reviewed for impairment as discussed below under “Accounting for the Impairment of Long-Lived Assets.”

Accounting for the Impairment of Long-Lived Assets

We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Upon such an occurrence, recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to forecasted undiscounted net cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. For long-lived assets held for sale, assets are written down to fair value, less cost to sell. Fair value is determined based on discounted cash flows, appraised values or management's estimates, depending upon the nature of the assets.

Beneficial Conversion Feature

If the conversion features of conventional convertible debt provide for a rate of conversion that is below market value at issuance, this feature is characterized as a beneficial conversion feature (“BCF”). We record a BCF as a debt discount pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ACF”) Topic 470-20 Debt with Conversion and Other Options. In those circumstances, the convertible debt is recorded net of the discount related to the BCF, and we amortize the discount to interest expense over the life of the debt using the effective interest method.

Revenue Recognition

For annual reporting periods after December 15, 2017, the Financial Accounting Standards Board (“FASB”) made effective ASU 2014-09 “Revenue from Contracts with Customers” to supersede previous revenue recognition guidance under current U.S. GAAP. Revenue is now recognized in accordance with FASB ASC Topic 606, Revenue Recognition. The guidance presents a single five-step model for comprehensive revenue recognition that requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Two options are available for implementation of the standard which is either the retrospective approach or cumulative effect adjustment approach. The guidance becomes effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with early adoption permitted. We determined to implement the cumulative effect adjustment approach to our implementation of FASB ASC Topic 606, with no restatement of the comparative periods presented. We intend to apply this method to any incomplete contracts we determine are subject to FASB ASC Topic 606 prospectively. As is more fully discussed below, we are of the opinion that none of our contracts for services or products contain significant financing components that require revenue adjustment under FASB ASC Topic 606.

In accordance with FASB ASC Topic 606, Revenue Recognition, we will recognize revenue when persuasive evidence of a significant financing component exists in our consulting and product sales contracts. We examine and evaluate when our customers become liable to pay for goods and services; how much consideration is paid as compared to the cash selling price of the goods or services; and, the length of time between our performance and the receipt of payment.

Product Sales

Revenue from product sales, including delivery fees, is recognized when an order has been obtained from the customer, the price is fixed and determinable when the order is placed, the product is shipped, and collectability is reasonably assured. For any shipments with destination terms, the Company defers revenue until delivery to the customer. Given the facts that (1) our customers exercise discretion in determining the timing of when they place their product order; and, (2) the price negotiated in our product sales is fixed and determinable at the time the customer places the order, we are not of the opinion that our product sales indicate or involve any significant customer financing that would materially change the amount of revenue recognized under the sales transaction, or would otherwise contain a significant financing component for us or the customer under FASB ASC Topic 606.

Costs of Revenues

Our policy is to recognize the costs of revenue in the same manner in conjunction with revenue recognition. Costs of revenues include the costs directly attributable to revenue recognition and include compensation and fees for services, travel and other expenses for services and costs of products and equipment. Selling, general and administrative expenses are charged to expense as incurred.

Stock-Based Compensation

Restricted shares are awarded to employees and entitle the grantee to receive shares of restricted common stock at the end of the established vesting period. The fair value of the grant is based on the stock price on the date of grant. We recognize related compensation costs on a straight-line basis over the requisite vesting period of the award, which to date has been one year from the grant date. Stock-based compensation during the quarterly reporting periods ended February 28, 2022 and 2021 was $89,374 and $522,334, respectively.

Income Taxes

We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns in accordance with applicable accounting guidance for accounting for income taxes, using currently enacted tax rates in effect for the year in which the differences are expected to reverse. We record a valuation allowance when necessary to reduce deferred tax assets to the amount expected to be realized. For the quarterly reporting periods ending February 28, 2022 and 2021, we incurred no income taxes and had no liabilities related to federal or state income taxes.

Loss Contingencies

From time to time the Company is subject to various legal proceedings and claims that arise in the ordinary course of business. On at least a quarterly basis, consistent with ASC 450-20-50-1C, if the Company determines that there is a reasonable possibility that a material loss may have been incurred, or is reasonably estimable, regardless of whether the Company accrued for such a loss (or any portion of that loss), the Company will confer with its legal counsel, consistent with ASC 450. If the material loss is determinable or reasonably estimable, the Company will record it in its accounts and as a liability on the balance sheet. If the Company determines that such an estimate cannot be made, the Company's policy is to disclose a demonstration of its attempt to estimate the loss or range of losses before concluding that an estimate cannot be made, and to disclose it in the notes to the financial statements under Contingent Liabilities.

Net Income (Loss) Per Common Share

We report net income (loss) per common share in accordance with FASB ASC 260, “Earnings per Share”. This statement requires dual presentation of basic and diluted earnings with a reconciliation of the numerator and denominator of the earnings per share computations. Basic net income (loss) per share is computed by dividing net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period and excludes the effects of any potentially dilutive securities. Diluted net income (loss) per share gives effect to any dilutive potential common stock outstanding during the period. The computation does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings.

Note 4. Net Income (Loss) Per Share

During three and six months ending February 28, 2022 and 2021, the Company recorded a net loss. The diluted weighted average shares calculation for the three and six months ended February 28, 2022 excludes 604,448,320 shares of common stock issuable upon conversion of outstanding convertible debt, and 142,089,094 shares of common stock issuable upon conversion of Series B Preferred stock as of February 28, 2022 as the effect would have been anti-dilutive.

Note 5. Intangible Assets

On February 20, 2020, the Company entered into a material definitive agreement with Lelantos Biotech, Inc., a Wyoming corporation (“Lelantos”), and its owners. On June 15, 2020, the Company and Lelantos entered into a modification agreement cancelling the Company's obligation to issue 400,000 shares of common stock and the convertible promissory notes. The Company and Lelantos agreed to a purchase price of five hundred thousand dollars ($500,000), payable by the issuance of a promissory note. The aggregate unpaid principal amount of the note is paid in monthly payments of seven thousand, five hundred dollars ($7,500) beginning on September 1, 2020, terminating on February 1, 2025. There is no interest on the note or on the unpaid balance. During the three months ended February 28, 2022, the Company recognized an impairment loss of $60,000 related to these patents.

Note 6. Acquisition of Natural Plant Extract of California, Inc.

On August 31, 2020 we issued a convertible promissory note pursuant to a Stock Purchase Agreement (the “SPA) with Robert L. Hymers, III (“Hymers”) to acquire 266,667 shares of common stock of Natural Plant Extract of California Inc., a California corporation (“NPE”), representing 18.8% of the outstanding capital stock of NPE on a fully diluted basis. With the exception of the entry into the subject material definitive agreements, no material relationship exists between us, or any of our affiliates or control persons and Hymers. Under the terms of the SPA, we acquired all rights and responsibilities of the equity stake for a purchase price of Two Million Forty Thousand United States Dollars ($2,040,000) (the “Purchase Price”). Relative to the payment of the Purchase Price, we agreed to: 1) pay Hymers twenty thousand dollars ($20,000) each month for a period of twenty-seven (27) months, with the first payment commencing September 1, 2020 and the remaining payments due and payable on the first day of each subsequent month until Hymers has received Five Hundred Forty Thousand United Stated Dollars ($540,000), and 2) issue Hymers a convertible promissory note in the amount of One Million Five Hundred Thousand United States Dollars ($1,500,000) (the “Note”). The Note bears interest at ten percent (10%) per annum. Hymers has the right at any time six (6) months after the issuance date to convert all or any part of the outstanding and unpaid principal, interest, fees, or any other obligation owed pursuant to the note. Conversion Price shall be calculated as follows: 60% of the lowest Trading Price of the common shares during the ten (10) days preceding the date the Company receive a notice of conversion. Unless permitted by the applicable rules and regulations of the principal securities market on which the common stock is then listed or traded, in no event shall we issue upon conversion of or otherwise pursuant to the note and the other notes issued, more than the maximum number of shares of common stock that we can issue pursuant to any rule of the principal United States securities market on which the common stock is then traded, which shall be 4.99% of the total shares outstanding at any time. A debt discount of $54,212 on the note payable at issuance was calculated based on the present value of the note using an implied interest rate of 10%. A debt discount of $270,886 was recognized. Accordingly, we recorded an initial value of its investment in NPE of $1,714,903.

On June 11, 2021, we amended the material definitive agreement with Hymers. The amendment relieved us from having to make monthly payments of $20,000 to Hymers in exchange for our issuing a convertible promissory note to Hymers for the balance owed of $440,000.

On January 27, 2021, the Company acquired an additional 18.8% interest in NPE from Edward Manolos, a Director of the Company and a related party. The Company issued 11,383,929 shares of common stock, which had a fair value of $1,821,429.

On February 16, 2021, we purchased 266,667 shares of common stock of NPE from Alan Tsai, in exchange for the issuance of 1,436,368 common shares of the Company. Other than with respect to the transaction, there was no material relationship between Mr. Tsai and us. By virtue of the transaction, we acquired 18.8% of the outstanding capital stock of NPE, bringing our total beneficial ownership in NPE to 56.5%. The transfer of control constituted an acquisition of NPE by the Company (the “NPE Acquisition”). For the three month period following the one year anniversary of the closing date, Mr. Tsai has the sole and irrevocable option to require the Company to repurchase the common shares issued to Mr. Tsai. If the value of the shares at the time notice is given is less than $150,000, Mr. Tsai will receive $150,000. If the value of the shares at the time notices is given is greater than $150,000, then Mr. Tsai will receive the market value of the shares.

As a result of the transaction, we became party to a Shareholder Agreement with respect to our ownership over the NPE Shares, dated June 5, 2020, by and among Alan Tsai, Robert Hymers III, Betterworld Ventures, LLC (“BWV”), Marijuana Company of America, Inc. and NPE. The Joinder Agreement contains terms and conditions including, but not limited to: the ownership and management of NPE, rights of shareholders concerning the transfer of shares in NPE, pre-emptive rights, drag-along rights, confidentiality, and term and termination.

The NPE acquisition is being accounted for as a business combination under ASC 805 as a result of the transfer of control.

The following information summarizes the purchase consideration and allocation of the fair values assigned to the assets at the purchase date:



Purchase Price Allocation:
Cash		2,200
Accounts receivable		193,607
Notes receivable		162,247
Property and equipment		1,153,000
Right of use asset – operating lease		673,425
Trademarks and trade names, estimated 5 year life		300,000
Licenses, estimated 10 year life		1,500,000
Customer relationships, estimated 5 year life		2,300,000
Goodwill		7,925,000
Total assets acquired	$	14,209,479

Accounts payable and accrued expenses		289,591
Right of use liability – operating lease		673,425
Notes payable		1,825,101
Notes payable – related party		105,539
Total Liabilities Assumed	$	2,893,656

Immediately prior to obtaining control, our total investment in NPE was adjusted to the preliminary fair value of $3,324,956, resulting in a loss on investment of $359,391 booked during the year ended August 31, 2021. As the Company completed its assessment of the fair value of assets assumed and liabilities incurred, the Company recognized equity income of $934,868 during the six months ended February 28, 2022, to arrive at a total initial non-controlling interest balance of $4,926,000 as of the acquisition date. The Company also adjusted the previously recognized loss on business of $454,768 based on the final fair value adjustments.

Note 7. Related Party Transactions

Note Payable to Shareholders

On May 25, 2019, we issued two notes payable to Company directors Edward Manolos and Dan Nguyen, each in the amount of $16,667. The notes, which do not have a defined due date, outline a 5% per annum interest rate. These notes are additionally described herein in Footnote 5- Notes Payable, Related Party and in the footnote outlining Related Party Transactions. Because of Mr. Manolos’ and Mr. Nguyen’s associations as directors, we consider these transactions with related persons, promoters and certain control persons.

Related party Transactions

In March 2018 and May 2018, a legal custodian of the Company funded the Company $600 in advances. On August 31, 2018, this amount was reclassified as a note payable, that bears interest at an annual rate of 10% and is payable upon demand.

On August 31, 2020, the Company issued a convertible note payable and a note payable to Robert L. Hymers III in connection with the acquisition of an 18.8% equity interest in NPE. See Note 9 and Note 6.

On November 16, 2020, we entered into a business acquisition agreement with Ethos Technology LLC, dba Comply Bag, a California limited liability company (“Ethos”). Ethos is a development stage business in the process of entering the market for cannabis trackable storage bags. By virtue of the agreement, Ethos sold, assigned, and transferred to the Company all of Ethos’ business, including all of its assets and associated liabilities, in exchange for the Company’s issuance of an aggregate of 6,000,000 common shares. 3,000,000 shares were due at signing, with 1,500,000 shares being issued to Edward Manolos, and 1,500,000 shares being issued to Thang Nguyen. Mr. Manolos is a director of the Company and a related party. Mr. Nguyen is the brother of Dan Van Nguyen, a director of the Company and a related party. After Ethos ships orders for Ethos products equaling $1,000,000 to unaffiliated parties, the Company will issue to Messrs. Manolos and Nguyen an additional 1,500,000 shares of common stock each.

On November 16, 2020, the Company sold an aggregate 3,000,000 shares of Company common stock, par value $0.001, equal in value to $177,000 based on the closing price on November 16, 2020. Of the total sold, 1,500,000 shares of common stock were sold to Edward Manolos and 1,500,000 shares of common stock were sold to Thang Nguyen. The sales were made in regards to the Company’s acquisition of Ethos, and its disclosures under Item 1.01 are incorporated herein by reference. The Company issued the above shares of its common stock pursuant to the exemption from the registration requirements of the Securities Act of 1933, as amended, available to the Company by Section 4(a)(2) promulgated thereunder due to the fact that it was an isolated issuance and did not involve a public offering of securities. Messrs. Manolos and Nguyen were “accredited investors” and/or “sophisticated investors” pursuant to Section 501(a)(b) of the Securities Act, who provided the Company with representations, warranties and information concerning their qualifications as “sophisticated investors” and/or “accredited investors.” The Company provided and made available to Messrs. Manolos and Nguyen full information regarding its business and operations. There was no general solicitation in connection with the offer or sale of the restricted securities. Messrs. Manolos and Nguyen acquired the restricted common stock for their own accounts, for investment purposes and not with a view to public resale or distribution thereof within the meaning of the Securities Act. The restricted shares cannot be sold unless subject to an effective registration statement by the Company, or by an exemption from registration requirements of Section 5 of the Securities Act—the existence of any such exemption subject to legal review and approval by the Company.

On January 27, 2021 the Company closed a material definitive agreement (MDA) with Edward Manolos, a director and related party. Pursuant to the MDA, the Company purchased from Mr. Manolos 266,667 shares of common stock in Natural Plant Extract of California Inc., a California corporation (“NPE”), representing 18.8% of the outstanding capital stock of NPE on a fully diluted basis. NPE operates a licensed psychoactive cannabis manufacturing and distribution business operation in Lynwood, California. NPE is a privately held corporation. Under the terms of the MDA, the Registrant acquired all beneficial ownership over the NPE shares in exchange for a purchase price of two million forty thousand dollars ($2,040,000). In lieu of a cash payment, the Registrant agreed to issue Mr. Manolos 11,383,929 restricted common shares, valued for purposes of the MDA at $0.1792 per share. In connection with the MDA, the Registrant became a party to a Shareholders Agreement by and among Alan Tsai, Hymers, Betterworld Ventures, LLC, Marijuana Company of America, Inc. and NPE. The Shareholders Agreement contains customary rights and obligations, including restrictions on the transfer of the Shares. Additionally, the Registrant intends, upon completion of the terms and conditions of the Material Definitive Agreement, to control the production, manufacturing and distribution of both NPE and the Registrant’s products.

On May 12, 2021, we entered into an agreement to operate a joint venture through a new Nevada corporation named MCOA Lynwood Services, Inc. Mr. Edward Manolos is a director of both parties to the agreement and this the agreement was an agreement between related parties. The parties agreed to finance a regulated and licensed laboratory to produce various cannabis products under the legal framework outlined by the City of Lynwood, California, Los Angeles County and the State of California. We own a controlling interest in Natural Plant Extract of California, Inc., which operates a licensed cannabis manufacturing operation in Lynwood, California. As its contribution the joint venture, MCOA agreed to purchase and install equipment for joint venture operations, which will then be rented to the joint venture, and also provide funding relating to marketing the products produced by the capital equipment. We agreed to provide use of its manufacturing and distribution licenses; access to its Lynwood, California facility; use of the specific areas within the Lynwood Facility suitable for the types of manufacturing selected by the joint venture; and, management expertise require to carry on the joint venture’s operations. Ownership of the joint venture was agreed to be 60% in us and 40% with MCOA. Royalties from profits realized as the result of sales of products from the joint venture was also agreed to be distributed as 60% in us and 40% to MCOA. Development of the joint venture is ongoing and is considered in the development stage. In January 2022, the Company agreed to issue 75,000,000 shares of common stock related to its obligations under the joint venture, and recognized a loss of $165,000 related to the issuance.

On May 12, 2021, we entered into a material definitive agreement not made in the ordinary course of its business. The parties to the material definitive agreement are the Registrant and Marijuana Company of America, Inc., a Utah corporation (“MCOA”). Mr. Edward Manolos is a director of both the Company and MCOA, and thus agreement is between related parties. Previously, on September 30, 2020, the Registrant and MCOA entered into a Share Exchange Agreement whereby the Registrant acquired that number of shares of MCOA’s common stock, par value $0.001, equal in value to $650,000 based on the closing price for the trading day immediately preceding the effective date, in exchange for the number of shares of the Registrant’s common stock, par value $0.001, equal in value to $650,000 based on the closing price for the trading day immediately preceding the effective date. For both parties, the Share Exchange Agreement contained a “true-up” provision requiring the issuance of additional common stock in the event that a decline in the market value of the parties’ common stock should cause the aggregate value of the stock acquired pursuant to the Share Exchange Agreement to fall below $650,000.

Complementary to the Share Exchange Agreement, Registrant and MCOA entered into a Lock-Up Agreement dated September 30, 2020 (the “Lock-Up Agreement”), providing that the shares of common stock acquired pursuant to the Share Exchange Agreement shall be subject to a lock-up period preventing its sale for a period of 12 months following issuance, and limiting the subsequent sale to aggregate maximum sale value of $20,000 per week, or $80,000 per month. On June 9, 2021, the parties amended their securities exchange agreement to delete the lock up leak out agreement, and the requirement to conduct quarterly reviews of each party’s respective stock price for purposes of evaluating whether additional share issuances are required to maintain the value of exchanged common shares equal to $650,000. As consideration for the amendment, we issued MCOA 618,000 shares of restricted common stock. During the three months ended, the Company sold a total of 243,000,000 shares of common stock of MCOA for cash proceeds of $303,967 and recognized a gain on sale of investment $60,967.

Note 8. Notes Payable

On February 12, 2020, the Company issued three Sellers Acquisition promissory notes having an aggregate principal amount of $500,000 pursuant to an Acquisition Agreement to acquire Lelantos Biotech. The notes mature May 31, 2020; $450,000 (two tranches of $225,000) and $50,000 of the notes bear interest at the rate of 8% and 5% per annum, respectively. In the event, the notes are not paid within the Cash Repayment Period (prior to the Maturity Date), the notes specify the holder shall have two options for repayment including: [a] an Alternative Payment Stake Option equal to a 6.75%, 6.75% and 1.5% (or a pro-rated amount if the debt has been partially paid) fully diluted ownership position in the Company after August 4, 2020, August 12, 2020 and August 30, 2020, respectively; or [b] a Buy Out Option, any time after the note has been outstanding for at least one year, equal to the total outstanding shares of the Company on the day of election, times 6.75%, 6.75% and 1.5%, respectively, times the average closing price of the Company’s common stock over the preceding 30 trading days, times 40% (due and payable within 90 days). Anti-dilution rights are provided for five years on the Sellers Acquisition notes and for 182 days after conversion to an Alternative Payment Stake. The notes include a Leak Out provision, should the Alternative Payment Stake option be elected, whereby no more than 30% of the holdings may be sold during the first 30 days after clearance for trading and no more than 25% of the remaining shares sold during any subsequent 30-day period. The notes are secured by a Security Agreement, require common shares to be reserved, are transferrable and are Senior to other debt of the Company. At maturity, on May 31, 2020, (i) the Company received forbearance agreements for the two tranches of $225,000 each whereby the maturity date was extended to July 15, 2020 and the interest rate was increased to 9%; and (ii) the $50,000 note and all accrued interest thereon, in the amount of $747, was forgiven. Accordingly, the Company recognized a gain for debt forgiveness of $50,747. On June 15, 2020, the Company entered into a modification agreement relative to the February 12, 2020 issued notes. Pursuant to the modification agreement, the Company issued a promissory note to Lantos in the amount of five hundred thousand dollars ($500,000). The Company may prepay the note in whole or in part at any time or from time to time without penalty or premium by paying the principal amount to be prepaid. The aggregate unpaid principal amount of the note is paid in monthly payments of seven thousand, five hundred dollars ($7,500) beginning on September 1, 2020, terminating on February 1, 2025. There is no interest on the note or on the unpaid balance. As of February 28, 2022, the carrying value of the notes was $450,000 and accrued interest payable was $76,438. As of August 31, 2021, the carrying value of the notes was $450,000 and accrued interest payable was $55,824.

On February 12, 2020, the Company entered into an Independent Consulting Agreement with a consultant to provide services from February 12, 2020 through December 14, 2020 (the “Consulting Agreement”). Pursuant to the Consulting Agreement, the Company issued to the consultant a Compensation promissory note having a principal amount of $100,000 for the Deferred Compensation portion of the Consulting Agreement. The note matures August 4, 2020 and bears interest at the rate of 8% per annum. In the event, the note is not paid within the Cash Repayment Period (prior to the Maturity Date), the note specifies the holder shall have two options for repayment including: [a] an Alternative Payment Stake Option equal to a 8.5% (or a pro-rated amount if the debt has been partially paid) fully diluted ownership position in the Company after August 4, 2020; or [b] a Buy Out Option, any time after the note has been outstanding for at least one year, equal to the total outstanding shares of the Company on the day of election, times 8.5% times the average closing price of the Company’s common stock over the preceding 30 trading days, times 40% (due and payable within 90 days). Anti-dilution rights are provided for five years on the Compensation note and for 182 days after conversion to an Alternative Payment Stake. The note includes a Leak Out provision, should the Alternative Payment Stake option be elected, whereby no more than 30% of the holdings may be sold during the first 30 days after clearance for trading and no more than 25% of the remaining shares sold during any subsequent 30-day period. The note is secured by a Security Agreement, requires common shares to be reserved, is transferrable and is Senior to other debt of the Company. As of February 28, 2022, the carrying value of the note was $100,000 and accrued interest payable was $14,400. As of August 31, 2021, the carrying value of the note was $100,000 and accrued interest payable was $12,405.

Note 9. Convertible Notes Payable

On January 12, 2021, the Company entered into a Securities Purchase Agreement in connection with the issuance of a 10% convertible note with the principal amount of $115,500, with an accredited investor. The note is convertible beginning 61 days from issuance at a fixed conversion price of $0.10 per share or 60% or the lowest trading price for ten days prior to conversion in the event that the Company’s stock trades at less than $0.10 per share. The Company received net proceeds of $100,000. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $115,500, which is being amortized to interest expense through the maturity date. During the six months ended February 28, 2022, the lender converted principal and accrued interest of $40,000 and $3,112 into 6,676,057 shares of common stock. As of February 28, 2022, the Company repaid all principal and accrued interest in full.

On January 26, 2021, the Company entered into a Securities Purchase Agreement in connection with the issuance of a 10% convertible note with the principal amount of $243,875, with an accredited investor. The note is convertible at 70% of the average of the three lowest trading prices for 20 days prior to conversion. The Company received net proceeds of $215,500. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $243,875, which is being amortized to interest expense through the maturity date. During the year ended August 31, 2021, the lender converted principal of $125,0000 into 2,647,410 shares of common stock. During the six months ended February 28, 2022, the lender converted principal and accrued interest of $118,875 and $9,543 into 11,446,165 shares of common stock. As of February 28, 2022, the Company repaid all principal and accrued interest in full.

On January 26, 2021, the Company entered into a Securities Purchase Agreement in connection with the issuance of a 10% convertible note with the principal amount of $243,875, with an accredited investor. The note is convertible at 70% of the average of the three lowest trading prices for 20 days prior to conversion. The Company received net proceeds of $215,500. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $243,875, which is being amortized to interest expense through the maturity date. During the year ended August 31, 2021, the lender converted principal and accrued interest of $15,000 and $2,250 into 208,191 shares of common stock. During the six months ended February 28, 2022, the lender converted principal and accrued interest of $228,875 and $14,307 into 27,063,391 shares of common stock. As of February 28, 2022, the Company repaid all other principal and accrued interest in full.

On March 8, 2021, the Company entered into a Securities Purchase Agreement in connection with the issuance of a 10% convertible note with the principal amount of $215,000, with an accredited investor. The note is convertible at 70% of the average of the three lowest trading prices for 20 days prior to conversion. The Company received net proceeds of $191,000. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $215,000, which is being amortized to interest expense through the maturity date. During the six months ended February 28, 2022, the Company paid $20,000 in principal and $5,244 of accrued interest, incurred default principal of $75,250 and the lender converted principal and accrued interest of $270,250 and $21,276 into 81,397,959 shares of common stock. As of February 28, 2022, the Company repaid all other principal and accrued interest in full.

On March 16, 2021, the Company entered into a Securities Purchase Agreement in connection with the issuance of a 10% convertible note with the principal amount of $215,000, with an accredited investor. The note is convertible at 70% of the average of the three lowest trading prices for 20 days prior to conversion. The Company received net proceeds of $191,000. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $215,000, which is being amortized to interest expense through the maturity date. During the six months ended February 28, 2022, the lender converted principal and accrued interest of $215,000 and $12,372 into 30,087,611 shares of common stock. As of February 28, 2022, the Company repaid all other principal and accrued interest in full.

On May 20, 2021, the Company entered into a Securities Purchase Agreement in connection with the issuance of a 8% convertible note with the principal amount of $130,000, with an accredited investor. The note is convertible at 60% of the average of the three lowest trading prices for 15 days prior to conversion. The Company received net proceeds of $108,000. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $130,000, which is being amortized to interest expense through the maturity date. During the six months ended February 28, 2022, the lender converted principal and accrued interest of $130,000 and $6,261 into 46,880,909 shares of common stock. As of February 28, 2022, the Company repaid all other principal and accrued interest in full.

On June 16, 2021, the Company entered into a Securities Purchase Agreement in connection with the issuance of a 8% convertible note with the principal amount of $135,000, with an accredited investor. Commencing one hundred eighty (180) days following the issuance date of the notes, the noteholders shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at variable conversion price of 65% of the average two (2) lowest trading prices for the common stock during the fifteen (15) trading day ending on the latest complete trading day prior to the conversion date. The Company is prohibited from effecting a conversion of the note to the extent that, as a result of such conversion, the noteholder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note. The Company received net proceeds of $108,000. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $130,000, which is being amortized to interest expense through the maturity date. During the six months ended February 28, 2022, the Company paid $55,109 in principal and $44,891 of accrued interest, and the lender converted principal and accrued interest of $47,560 and $2,440 into 14,912,584 shares of common stock. As of February 28, 2022, the carrying value of the note was $28,262, net of discount of $4,069, and accrued interest was $0.

On August 4, 2021, the Company entered into a Securities Purchase Agreement in connection with the issuance of a 8% convertible note with the principal amount of $110,000, with an accredited investor. The Company received net proceeds of $89,000. Commencing one hundred eighty (180) days following the issuance date of the notes, the noteholders shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at variable conversion price of 60% of the lowest previous fifteen (15) trading day closing trade prices of the Company’s common stock, subject to adjustment. The Company is prohibited from effecting a conversion of the note to the extent that, as a result of such conversion, the noteholder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $110,000, which is being amortized to interest expense through the maturity date. During the six months ended February 28, 2022, the Company paid $62,000 in principal and $31,702 of accrued interest, and the lender converted principal and accrued interest of $48,000 and $1957 into 21,910,886 shares of common stock. As of February 28, 2022, the Company repaid all principal and accrued interest in full.

On September 22, 2021, the Company entered into a $25,000 convertible promissory note with a vendor to settled approximately $21,000 of outstanding accounts payable. The note matures on March 22, 2022, is non-interest bearing, and can be converted at the holders option into common stock of the Company at 65% of the lowest trading price of the common stock for the 20 days prior to conversion. As of February 28, 2022, the carrying value of the note was $25,000 and accrued interest was $1,089.

On January 3, 2022, the Company entered into a Securities Purchase Agreement in connection with the issuance of a 10% convertible note with the principal amount of $100,000, with an accredited investor. The Company received net proceeds of $80,000. In addition, the Company issued 3,000,000 shares valued at $25,200, which were recorded as deferred financing costs. The noteholders shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at variable conversion price of 90% of the lowest previous ten (10) trading day closing trade prices of the Company’s common stock, subject to adjustment. The Company is prohibited from effecting a conversion of the note to the extent that, as a result of such conversion, the noteholder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $120,000, which is being amortized to interest expense through the maturity date. As of February 28, 2022, the carrying value of the note was $15,342, net of discount of $84,658, and accrued interest was $1,584.

On January 6, 2022, the Company entered into a Securities Purchase Agreement in connection with the issuance of a 8% convertible note with the principal amount of $120,000, with an accredited investor. The Company received net proceeds of $102,000. The noteholders shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at variable conversion price of 60% of the lowest previous fifteen (15) trading day closing trade prices of the Company’s common stock, subject to adjustment. The Company is prohibited from effecting a conversion of the note to the extent that, as a result of such conversion, the noteholder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $120,000, which is being amortized to interest expense through the maturity date. As of February 28, 2022, the carrying value of the note was $18,411, net of discount of $101,589, and accrued interest was $1,394.

On February 11, 2022, the Company entered into a Securities Purchase Agreement in connection with the issuance of a 8% convertible note with the principal amount of $130,000, with an accredited investor. The Company received net proceeds of $110,400. The noteholders shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at variable conversion price of 60% of the lowest previous fifteen (15) trading day closing trade prices of the Company’s common stock, subject to adjustment. The Company is prohibited from effecting a conversion of the note to the extent that, as a result of such conversion, the noteholder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $130,000, which is being amortized to interest expense through the maturity date. As of February 28, 2022, the carrying value of the note was $19,945, net of discount of $110,055, and accrued interest was $484.

On February 11, 2022, the Company entered into a Securities Purchase Agreement in connection with the issuance of a 12% convertible note with the principal amount of $615,000, with an accredited investor. The Company received net proceeds of $512,820. The noteholders shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at fixed conversion price of $0.0025. The Company is prohibited from effecting a conversion of the note to the extent that, as a result of such conversion, the noteholder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the note. As a result of the variable exercise price of the Company’s convertible notes and deferred finance costs, upon issuance, the Company recognized total debt discount of $615,000, which is being amortized to interest expense through the maturity date. As of February 28, 2022, the carrying value of the note was $94,356, net of discount of $520,644, and accrued interest was $3,437.

Series B Convertible Preferred Stock

On February 28, 2021 the Company filed a Certificate of Designation of Preferences, Rights of Series B Preferred Stock. The Series B Convertible Preferred stock has 1,000,000 shares authorized, has a par value of $0.001 per share and a stated value of $1.00. Each share of Series B Preferred Stock will carry an annual dividend in the amount of eight percent (8%) of the Stated Value (the “Divided Rate”), which shall be cumulative, payable solely upon redemption, liquidation or conversion. The Series B is convertible into shares of common stock at a rate of 63% of the market price, based on the average of the two lowest trading prices during the previous 15 days. Additionally, the Series B Convertible Preferred Stock is mandatorily redeemable 16 months from the issuance date in cash. Upon the occurrence of an Event of Default (as defined herein), the Dividend Rate shall automatically increase to twenty two percent (22%). Based on the terms of the Series B Preferred Stock Purchase Agreement, and in accordance with ASC 480-10, the instruments are accounted for as a liability.

During the year ended August 31, 2021, the Company entered into five Series B Preferred Stock Purchase Agreements for an aggregate amount of $367,750, with an accredited investor. During the six months ended February 28, 2022, the lender converted principal and accrued interest of $367,750 and $14,710 into 51,181,398 shares of common stock.

During the six months ended February 28, 2022, the Company entered into five Series B Preferred Stock Purchase Agreements for an aggregate amount of $277,500, with an accredited investor. The Company received cash proceeds of $ 260,000 and recognized total discount of $260,000 related to the embedded conversion feature with variable exercise price terms.

As of February 28, 2022, the carrying value of the Series B Convertible Preferred Stock liability in aggregate was $172,142, net of discount of $105,358, and accrued interest was $24,336.

As of February 28, 2022, there were 277,750 shares of Series B Convertible Preferred Stock outstanding.

Related Parties

During the three months ended February 29, 2020, the Company issued two convertible promissory notes having an aggregate principal amount of $133,101 in exchange for accrued expenses owed to related parties, of which $79,333 is payable to the Company’s Chief Executive Officer and $53,768 is payable to the Robert L. Hymers III. The notes mature two years from the respective issuance date and bear interest at the rate of 10% per annum, payable at maturity. The noteholders shall have the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at a variable conversion price of 50% of the average of the previous twenty (20) trading day closing prices of the Company’s common stock, subject to adjustment. As a result of the variable conversion prices, upon issuance, the Company recognized total debt discount of $133,101, which is being amortized to interest expense over the term of the notes. On May 22, 2020, the Chief Executive Officer converted $79,333 in principal and $2,608 of accrued interest into 694,902 shares of common stock to be issued having a fair value of $232,792. The conversion resulted in the elimination of $70,313 of remaining debt discount, the elimination of $231,632 of derivative liabilities, and a $10,468 gain on conversion that resulted from a related party and was therefore included in Additional paid-in capital. As of August 31, 2020, the carrying value of the remaining note with the former chief financial officer was $15,884, net of debt discount of $37,884 and accrued interest was $3,138. On December 9, 2020, Mr. Hymers converted all principal of $53,768 and all accrued interest of $4,626 into 878,190 shares of common stock.

On April 30, 2020, the Company entered into a settlement agreement with its former Chief Financial Officer (Robert L. Hymers III, hereinafter referred to as the “CFO”) whereby the CFO resigned and the Company issued a promissory note for $30,000, which represented the remaining amount owed to the CFO for services rendered. The note matures December 31, 2020 and bears interest at the rate of 10% per annum, payable at maturity. The noteholder has the right to convert all or any part of the outstanding and unpaid principal balance of the note, at any time, into shares of common stock of the Company at a fixed conversion price of $0.02 per share, subject to adjustment. As a result of the beneficial conversion price, upon issuance, the Company recognized debt discount of $30,000, which is being amortized to interest expense over the term of the note. As of August 31, 2020, the carrying value of the note was $15,061, net of debt discount of $14,939 and accrued interest was $1,011. On October 9, 2020, Mr. Hymers converted the note payable into 1,500,000 shares of common stock.

On August 21, 2020 the Company, issued a convertible note pursuant to a Stock Purchase Agreement (the “SPA) to acquire 266,667 shares of common stock of Natural Plant Extract of California Inc., a California corporation (“NPE”), representing 18.8% of the outstanding capital stock of NPE on a fully diluted basis. With the exception of the entry into the subject material definitive agreements, no material relationship exists between the Registrant, or any of the Registrant’s affiliates or control persons and Hymers. Under the terms of the SPA, the Registrant acquired all rights and responsibilities of the equity stake for a purchase price of Two Million Forty Thousand United States Dollars ($2,040,000) (the “Purchase Price”). Relative to the payment of the Purchase Price, the registrant agreed to: 1) pay Hymers Twenty Thousand United States Dollars ($20,000) each month for a period of twenty-seven (27) months, with the first payment commencing September 1, 2020 and the remaining payments due and payable on the first day of each subsequent month until Hymers has received Five Hundred Forty Thousand United Stated Dollars ($540,000), and 2) issue Hymers a convertible promissory note in the amount of One Million Five Hundred Thousand United States Dollars ($1,500,000) (the “Note”). The Note bears interest at ten percent (10%) per annum. The Holder shall have the right at any time six (6) months after the Issuance Date to convert all or any part of the outstanding and unpaid principal, interest, fees, or any other obligation owed pursuant to the note. Conversion Price shall be calculated as follows: 60% of the lowest Trading Price of the common shares during the ten (10) days preceding the date the Company receive a notice of conversion. Unless permitted by the applicable rules and regulations of the principal securities market on which the Common Stock is then listed or traded, in no event shall the Registrant issue upon conversion of or otherwise pursuant to the note and the other notes issued more than the maximum number of shares of Common Stock that the Company can issue pursuant to any rule of the principal United States securities market on which the Common Stock is then traded, which shall be 4.99% of the total shares outstanding at any time. A debt discount of $54,212 on the note payable at issuance was calculated based on the present value of the note using an implied interest rate of 10%. A debt discount of $270,886 was recognized. Accordingly, the Company recorded an initial value of its investment in NPE of $1,714,903. At the time the note becomes convertible, the Company will recognize a derivative liability at fair value related to the embedded conversion option at that time. Prior to these transactions, Robert Hymers III and Alan Tsai each sold equity interest representing a total of 18.8% of the outstanding equity interest of NPE to Edward Manolos, a Director and preferred stockholder of the Company in a private transaction. As a result of these two transactions, the Company beneficially controls approximately 37% of the equity of NPE. After this transaction, a venture capital company controls 40% of the equity interests in NPE, the Company, Alan Tsai and Edward Manolos each control 18.8% and one other entity controls 3.5%. As of November 30, 2021, the principal balance on the note payable to Mr. Hymers was $690,000 and accrued interest was $86,203. On February 11, 2022, the Company authorized and entered into an exchange agreement with Mr. Hymers to exchange the remaining $690,000 principal and $164,156 of accrued interest into a new $854,156 note (“exchange note”). The exchange note is convertible at a fixed price of $0.0025 per share and matures on February 11, 2023. As of February 28, 2022, the principal balance on the note payable to Mr. Hymers was $854,156 and accrued interest was $2,476.

The Company evaluated its interest in NPE as of August 31, 2020 under ASC 810. Management determined that it had a variable interest in NPE, but that NPE does not meet the definition of a variable interest entity, and does not have an indirect voting interest of greater than 50%. Based on these factors, the investment in NPE by the Company, the investment in NPE will be accounted for as an equity method investment under the measurement alternative available under ASC 321 with the Company recording its share of the profits and losses of NPE at each reporting period. The initial investment balance was $1,714,903 based on the initial fair value estimate of the note payable and convertible note payable issued as consideration for the investment. The Company subsequently acquired control of NPE and began consolidating the results of operations into its financial statements, as described in Note 7.

As of August 31, 2021, the Company was in default of the $540,000 note payable to Robert Hymers. On January 3, 2021, the Company entered into a settlement agreement with Robert Hymers concerning five delinquent payments totaling $100,000, whereby 1,585,791 shares of common stock were issued in settlement of those payments. As of February 28, 2021, the Company missed five additionally $20,000 payments, and remains in default of this agreement. On June 11, 2021, the Company entered into an agreement with Robert Hymers. As of the date of the amendment, the Company owed Mr. Hymers $440,000. The parties agreed to exchange the Company’s obligations to make monthly payments under the stock purchase agreement for a Convertible Note for the same amount. The note matures on June 11, 2022, bears interest at 10% and is convertible into common stock of the Company at $0.004 per share, subject to standard anti-dilution provisions. During the six months ended February 28, 2022, the lender converted principal of $40,000 into 17,543,860 shares of common stock. As of February 28, 2022, the carrying value of the note was $275,836, net of discount of $124,164, and accrued interest was $29,600.

On December 28, 2021, the Company entered into a convertible note agreement with Robert Hymers, for $24,774 in settlement of outstanding accounts payable. The note was convertible at 55% of the lowest trading price of the Company’s common stock for the 15 days prior conversion. On December 29, 2021, the Company issued 10,475,053 shares of common stock pursuant to the conversion of a total of $24,774 in principal.

See Note 10 for further discussion of the accounting treatment of the embedded conversion options of the above promissory notes payable as derivative liabilities.

Note 10. Derivative Liability and Fair Value Measurement

Upon the issuance of the convertible promissory notes with variable conversion prices and fixed conversion prices with reset provisions, the Company determined that the features associated with the embedded conversion option embedded in the debentures should be accounted for at fair value, as a derivative liability, as the Company cannot determine if a sufficient number of shares would be available to settle all potential future conversion transactions.

At the issuance date of the convertible notes payable during the six months ended February 28, 2022, the Company estimated the fair value of all embedded derivatives of $2,742,372 using the Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 277% to 315%, (3) risk-free interest rate of 0.07% to 1.07%, and (4) expected life of 0.50 years to 1.0 years.

On February 28, 2022, the Company estimated the fair value of the embedded derivatives of $1,942,485 using the Black Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 264%, (3) risk-free interest rate of 0.10% to 0.24%, and (4) expected life of 0.06 to 0.95 years.

The Company adopted the provisions of ASC 825-10, Financial Instruments (“ASC 825-10”). ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value.

•

Level 1 — Observable inputs that reflect quoted market prices (unadjusted) for identical assets and liabilities in active markets;

•

Level 2 — Observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities; and

•

Level 3 — Unobservable inputs that are supported by little or no market activity that are significant to the fair value of assets or liabilities.

All items required to be recorded or measured on a recurring basis are based upon Level 3 inputs.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.

The Company recognizes its derivative liabilities as Level 3 and values its derivatives using the methods discussed below. While the Company believes that its valuation methods are appropriate and consistent with other market participants, it recognizes that the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The primary assumptions that would significantly affect the fair values using the methods discussed are that of volatility and market price of the underlying common stock of the Company.

As of February 28, 2022, the Company did not have any derivative instruments that were designated as hedges.

Items recorded or measured at fair value on a recurring basis in the accompanying financial statements consisted of the following items as of February 28, 2022 and August 31, 2021:


		February 28, 2022		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Derivative liability	$	1,942,485	$	—	$	—	$	1,942,485

August 31, 2021

Quoted Prices in Active Markets for Identical Assets

(Level 1)

Significant Other Observable Inputs

(Level 2)

Significant Unobservable Inputs

(Level 3)

Derivative liability

4,747,614

—

4,747,614

The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities for the six months ended February 28, 2022:



Balance, August 31, 2021	$	4,747,614
Transfers in due to issuance of convertible promissory notes		2,742,372
Transfers out due to conversions of convertible promissory notes		(2,058,941	)
Change in derivative liability for the six months ended February 28, 2022		(3,488,560	)

Balance, February 28, 2022	$	1,942,485

The total impact to the Company’s consolidated statement of operations for the six months ended February 28, 2022 was a gain of $3,488,560, representing the impact of retirement of derivative liabilities from payments on convertible promissory notes and the change in fair value of remaining derivative liabilities as of February 28, 2022.

Fluctuations in the Company’s stock price are a primary driver for the changes in the derivative valuations during each reporting period. As the stock price increases for each of the related derivative instruments, the value to the holder of the instrument generally increases, therefore increasing the liability on the Company’s balance sheet. Additionally, stock price volatility is one of the significant unobservable inputs used in the fair value measurement of each of the Company’s derivative instruments. The simulated fair value of these liabilities is sensitive to changes in the Company’s expected volatility. Increases in expected volatility would generally result in higher fair value measurement. A 10% change in pricing inputs and changes in volatilities and correlation factors would not result in a material change in our Level 3 fair value.

Note 11. Common Stock

As of February 28, 2022, there were 509,142,691 shares of Common Stock issued and outstanding. As of the date of this filing, April 19, 2022, there were 509,142,691 shares of Common Stock issued and outstanding.

On October 13, 2021, the Company amended its articles of incorporation to increase the number of authorized common shares to 1,000,000,000.

On January 6, 2022, the Company amended its articles of incorporation to increase the number of authorized common shares to 2,000,000,000.

On January 26, 2022, the Company issued 75,000,000 shares valued to settle the $135,000 contributed by MCOA related to the joint venture, and recognized a loss of $165,000 on the transaction.

On February 15, 2022, the Company amended its articles of incorporation to increase the number of authorized common shares to 3,000,000,000.

On February 22,2022, the Company received notices to exercise 24,804,305 warrants on a cashless basis resulting in the issuance of 23,300,000 shares of common stock.

During the six months ended February 28, 2022, the Company issued 51,181,398 shares of common stock pursuant to the conversion of 367,750 shares of Series B Convertible Preferred stock, and accrued interest of $14,710.

During the six months ended February 28, 2022, the Company issued 268,394,475 shares of common stock pursuant to the conversion of a total of $1,163,334 in principal and $76,569 in accrued interest and fees from three lenders.

During the six months ended February 28, 2022, the Company issued a total of 3,326,790 shares of common stock with a fair value of $89,374 to vendors for services rendered.

Note 12. Preferred Stock

There are 10,000,000 shares of preferred stock, par value $0.0001 per share, of the Company Preferred Stock in one or more series, and expressly authorized the Board of Directors of the Company. On December 16, 2019, the Board of Directors authorized the issuance of 8,000,000 preferred shares as “Series A Preferred Stock.” The Series A Preferred Stock is not convertible into any other form of Securities, including common shares, of the Company. Holders of Series A Preferred Stock shall be entitled to 50 votes for every Share of Series A Preferred Stock beneficially owned as of the record date for any shareholder vote or written consent. On May 28, 2020, Mr. Robert L. Hymers III, a former director and former chief financial officer, returned 2,000,000 Series A Preferred shares to the corporate treasury. As of February 28, 2021, there were 6,000,000 Series A Preferred shares issued and outstanding.

On February 28, 2021, the Company designated 1,000,000 shares of Series B Convertible Preferred Stock (“Series B Convertible Preferred Stock”). The Series B Convertible Preferred Stock earns dividends at 8% per year, and is convertible into shares of common stock at a rate of 63% of the market price, based on the average of the two lowest trading prices during the previous 15 days. Additionally, the Series B Convertible Preferred Stock is mandatorily redeemable 16 months from the issuance date in cash. The Company entered into several agreements with an investor for a total of 367,750 shares of Series B Convertible Preferred Stock during the year ended August 31, 2021 for a total purchase amount of $153,500. The Company received net proceeds of $350,000. In accordance with ASC 480-10, the Series B Convertible Preferred Stock is accounted for as a liability on the Company’s consolidated balance sheet based on the terms of the certificate of designation being more like a liability.

Note 13. Subsequent Events

Subsequent to February 28, 2022, the Company repaid $127,000 in principal and $43,013 of interest related to two five Series B Preferred Stock Purchase Agreements.

Subsequent to February 28, 2022, the Company sold 20,000,000 shares of MCOA for total proceeds of $13,000.

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

Forward-Looking Statements

Except for the historical information presented in this document, the matters discussed in this Form 10-Q for the quarter ended February 28, 2022, contain forward-looking statements which involve assumptions and our future plans, strategies, and expectations. These statements are generally identified by the use of words such as “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project,” or the negative of these words or other variations on these words or comparable terminology. These statements are expressed in good faith and based upon a reasonable basis when made, but there can be no assurance that these expectations will be achieved or accomplished.

Such forward-looking statements include statements regarding, among other things, (a) our potential profitability and cash flows, (b) our growth strategies, (c) our future financing plans, and (d) our anticipated needs for working capital. This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements. These statements may be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as in this Form 10-Q generally. Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the matters described in this Form 10-Q generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. In addition to the information expressly required to be included in this filing, we will provide such further material information, if any, as may be necessary to make the required statements, in light of the circumstances under which they are made, not misleading.

Although forward-looking statements in this report reflect the good faith judgment of our management, forward-looking statements are inherently subject to known and unknown risks, business, economic and other risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, other than as may be required by applicable law or regulation. Readers are urged to carefully review and consider the various disclosures made by us in our reports filed with the Securities and Exchange Commission which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operation and cash flows. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, our actual results may vary materially from those expected or projected.

Except where the context otherwise requires and for purposes of this Form 10-Q only, “we,” “us,” “our,” “Company,” “our Company,” and “MCTC” refer to Cannabis Global, Inc, formerly known as MCTC Holdings, Inc.

Overview

The following discussion and analysis of our financial condition and results of operations (“MD&A”) should be read in conjunction with our financial statements and the accompanying notes to the financial statements included in this Form 10-Q.

The disclosure is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Description of Business

Cannabis Global operates multiple cannabis businesses in California. The Company also has an active research and development programs in hemp and cannabis. Our previous research and development of industrial hemp, and industrial hemp-based CBD products, are currently suspended pending regulatory guidance from the U.S. Food and Drug Administration.

The Company operates and manages Natural Plant Extract of California, Inc. (NPE) which holds two active California cannabis licenses: (i) a Type 7 Manufacturing License; and, (ii) a Distribution License. These licenses allow NPE to distribute cannabis products in the State of California. Our operations at the NPE facility emphasize product manufacturing and distribution. We began taking customer orders for products manufactured at the NPE facility on April 21, 2021. These products included several types of cannabis products, including

• Cannabis flower packaged in various weights, which are sold to California licensed cannabis retailers and distributors;

• Cannabis Pre-rolls, which are sold to California licensed cannabis retailers and distributors; and,

• Cannabis edible products, which are sold to California licensed cannabis retailers and distributor

The cannabis products are Schedule 1 Controlled Substances under the CSA, and so are illegal under federal law.

Our sales from the above product categories amount to 97% of our operating revenues. Our cannabis research and development efforts have not generated material revenue as of the date of this Prospectus

On April 18, 2020, we formed a subsidiary Hemp You Can Feel, Inc., a California corporation (“HYCF”), as a wholly owned subsidiary of the Company. HYCF will be engaged in research and development of hemp and CBD products. However, HYCF’s operations are currently suspended pending regulatory guidance from the U.S. Food and Drug Administration.

In April, 2021, we signed a cannabis distribution agreement with Northern Lights Distribution, Inc. (NLD), a wholly owned subsidiary of NPE. NLD has a California cannabis distribution agreement allowing it to distribute cannabis and cannabis products in California.

Comply Bag™

Comply Bag™ features a multi-layer, low-density polyethylene outer shell that protects valuable shipments and allows manufacturers, buyers, and processors full view of contents to assess quality. Each Comply Bag™ contains financial institution-grade tamper-evident seams, self-sealing closures, and sequential numbering to ensure what is sent is what is received. In addition, because all U.S. states have implemented specific regulations for the tracking and tracing of cannabis shipments from seed to sale, Comply Bags™ features regulator demanded tracking features, such as those required in the California Cannabis Track-and-Trace (CCTT) system, including Unique Identifier Tags (UID) mandated by California via its contracted service provider, METRC, Inc.

Cannabis-Related Research and Development

Cannabis Global also has an active research and development program primarily focused on creating and commercialize engineered technologies delivering hemp extracts and cannabinoids to the human body. Additionally, we invest, or provide managerial services, in specialized areas of the regulated hemp and cannabis industries. Thus far, the Company has filed six provisional patents, three non-provisional patents.

Our R&D programs included the following:

1.	Development of new routes and vehicles for hemp extract and cannabinoid delivery to the human body.

2.	Production of unique polymeric nanoparticles and fibers for use in oral and dermal cannabinoid delivery.

3.	Research and commercialization of new methodologies to isolate and/or concentrate various cannabinoids and other substances that comprise industrial hemp oil and other extracts.

4.	Establishment of new methods to increase the bioavailability of cannabinoids to the human body utilizing nanoparticles and other proven bioenhancers, including naturally occurring and insect produced glycosides.

5.	Development of other novel inventions for the delivery of cannabinoids to the human body, which at this time are considered trade secrets by the Company.

The Company’s strategy is to develop a growing portfolio of intellectual property relating to the processing of hemp extracts and cannabinoids into forms that are easily and efficiently delivered to the human body and to companion animals.

The Company owns no issued patents. The Company’s patent activity to date is disclosed below. There are two categories of patents: (i) expired provisional patent applications which the Company now maintains as trade secrets; and, (ii) filed patent applications currently pending review by the U.S. Patent and Trademark Office (U.S.P.T.O.) and the International Patent Cooperation Union.

Expired Provisional Patents

A provisional patent application is a document issued by the U.S.P.T.O., that helps protect a new invention from being copied during the 12-month period before a formal patent application is filed. It is intended to give an inventor time to explore the idea, test its commercial feasibility, or refine a product before committing to the expensive and time-intensive process of a formal application. The Company filed the following provisional patent applications but chose not to pursue the filing of formal patent applications. The provisional patents thus lapsed 12 months after each respective filing, and the Company now maintains the intellectual properties related to each expired provisional patent application as a trade secret. Each of the following provisional patent applications were filed with the U.S.P.T.O.

Cannabinoid Delivery System and Method of Making

This provisional patent was filed September 13, 2019 (U.S. #62/900,181). A formal patent application was required to be filed by September 13, 2020. The Company chose to not pursue a formal patent application for this method patent and decided to maintain the intellectual properties as trade secrets. The provisional patent dealt the infusion of cannabis compounds into pharmaceuticals, foods, and beverages.

Water Soluble Compositions With Enhanced Bioavailability

This provisional patent was filed September 24, 2019 (U.S. #62/905,129). A formal patent application was required to be filed by September 24, 2020. The Company chose to not pursue a formal patent application for this method patent and decided to maintain the intellectual properties as trade secrets. The provisional patent dealt the infusion of cannabis compounds into pharmaceuticals, foods, and beverages.

Printed Shape Changing Article for the Delivery of Cannabinoids

This provisional patent was filed October 1, 2019 (U.S. #62/909,189). A formal patent application was required to be filed by October 1, 2020. The Company chose to not pursue a formal patent application for this method patent and decided to maintain the intellectual properties as trade secrets. The provisional patent dealt the infusion of cannabis compounds into pharmaceuticals, foods, and beverages.

Electrosprayed and Electrospun Cannabinoid Compositions

This provisional patent was filed November 4, 2019 (U.S. #62/930,358). A formal patent application was required to be filed by November 4, 2020. The Company chose to not pursue a formal patent application for this method patent and decided to maintain the intellectual properties as trade secrets. The provisional patent dealt the infusion of cannabis compounds into pharmaceuticals, foods, and beverages.

Cannabinoid Enriched Composition and Method of Treating a Medical Condition Therewith

This provisional patent was filed December 11, 2019 (U.S. #62/946,894). A formal patent application was required to be filed by December 11, 2020. The Company chose to not pursue a formal patent application for this method patent and decided to maintain the intellectual properties as trade secrets. The provisional patent dealt the infusion of cannabis compounds into pharmaceuticals, foods, and beverages.

Article, Method and Apparatus for Producing a Cannabinoid Enriched Beverage

This provisional patent was filed January 16, 2020 (U.S. #62/962,040). A formal patent application was required to be filed by January 16, 2021. The Company chose to not pursue a formal patent application for this method patent and decided to maintain the intellectual properties as trade secrets. The provisional patent dealt the infusion of cannabis compounds into pharmaceuticals, foods, and beverages.

Printed Shape Changing Article for Delivery of Cannabinoids

This provisional patent was filed September 23, 2020 U.S. (#62/082,399). A formal patent application was required to be filed by September 23, 2021. The Company chose to not pursue a formal patent application for this method patent and decided to maintain the intellectual properties as trade secrets. The provisional patent dealt the infusion of cannabis compounds into pharmaceuticals, foods, and beverages.

Filed Pending Patent Applications

A Cannaboside Composition and Method to Produce

This patent application was filed on January 18, 2021 (U.S.P.T.O. #17/151,607) and is currently pending review by the U.S. Patent and Trademark Office. The Company currently filed this patent application for international patent protection through the Patent Cooperation Treaty (PCT/US2021/013830). The Patent Cooperation Treaty was ratified by the United States and 152 other countries which constitute the International Patent Cooperation Union for the cooperation in the filing, searching, and examination, of applications for the protection of inventions, and for rendering special technical services amongst the treaty members. The application is pending. This patent application seeks protection for a method to allow the easier mixing of cannabis into foods and beverages. Generally, cannabis extracts are oil-based and do not mix well with water-based foods and beverages. The technology invented by the company involves feeding oil-based cannabis extracts to insects. The insects then process the extracts through their bodies resulting in water-based compounds being excreted in the insect bodies. These newly created water-soluble compounds can then be harvested for use in foods, beverages, or pharmaceuticals. The patent claims coverage of both the process to create the compounds, and the use of the compounds in foodstuffs and pharmaceutical preparations.

Electrosprayed and Electrospun Cannabinoid Compositions and Process to Produce

This patent application was filed on November 4, 2020 (U.S.P.T.O. #17/089,497 and is currently pending review by the U.S. Patent and Trademark Office. The Company currently filed this patent application for international patent protection through the Patent Cooperation Treaty (PCT/US2020/058937). The Patent Cooperation Treaty was ratified by the United States and 152 other countries which constitute the International Patent Cooperation Union for the cooperation in the filing, searching, and examination, of applications for the protection of inventions, and for rendering special technical services amongst the treaty members. The application is pending. The compositions invented by the company are nanoparticles and nanofibers made from cannabinoids. Nanoparticles and nanofibers are very small units of a substance. In the case of the technologies invented by the company, the units of cannabinoids created are in the areas between 100 nanometer and 700 nanometers wide. One nanometer is equal to one billionth of a meter. It is thought that cannabinoids of these sizes are more available to the human body and can be utilized in a host of different product applications to increase efficacy. An added feature of the invented technology is that the nanoparticles and nanofibers are based on all natural ingredients. This differs, in the company's opinion, significantly from other preparations that previously existed. Considering growing consumer taste for clean label products, the company believes natural compositions of cannabinoids will be highly preferred by consumers.

Cannabinoid Enriched Composition and Method of Using

This patent application was filed on December 11, 2020 (U.S.P.T.O. 17/120,042) and is currently pending review by the U.S. Patent and Trademark Office. The Company currently filed this patent application for international patent protection through the Patent Cooperation Treaty (PCT/US2021/64683). The Patent Cooperation Treaty was ratified by the United States and 152 other countries which constitute the International Patent Cooperation Union for the cooperation in the filing, searching, and examination, of applications for the protection of inventions, and for rendering special technical services amongst the treaty members. The application is pending. This patent application was filed on December 11, 2020 (U.S.P.T.O. 17/120,042) and is currently pending review by the U.S. Patent and Trademark Office. The Company currently filed this patent application for international patent protection through the Patent Cooperation Treaty (PCT/US2021/64683). The Patent Cooperation Treaty was ratified by the United States and 152 other countries which constitute the International Patent Cooperation Union for the cooperation in the filing, searching, and examination, of applications for the protection of inventions, and for rendering special technical services amongst the treaty members. The application is pending. Specifically, the technology for which the company seeks protection are cannabinoids in the form of free-flowing powders that can be used in foods and beverages. The Company believes use of the technology could potentially significantly lower manufacturing costs for numerous manufacturers. Cannabinoids are typically sticky and unstable substances that are difficult to work with relative to the manufacturing of foods, beverages, and pharmaceutical products. The cannabinoid containing free-flowing powders invented by the company are significantly easier for manufacturers to utilize, thus potentially reducing manufacturing costs.

Trademark applications are as follows:

•

Trademark – Hemp You Can Feel™ – On August 27, 2019, the Company filed a trademark application with the U.S.P.T.O. for its Hemp You Can Feel™ trade name. The U.S. Application Serial Number is 88595425. On June 24, 2020, the Company received a Notice of Nonfinal Office Action from the USPTO indicating the Company would have six months to respond to issues presented the Company by USPTO or be abandoned. The Company plans to re-file the application.

•

Trademark – Gummies You Can Feel™. The Company received a Notice of Allowance from the USPTO on March 24, 2020. The U.S. Serial Number for the trademark is 88590925.

•

Trademark – Comply Bag™. During January of 2021, the Company filed a trademark application with the U.S. Patent and Trademark Office (USPTO) for its Comply Bag™ trade name. The application is pending.

•

There can be no assurance any trademark protection will be provided, or that we will be successful in protecting our trademarks if issued.

Hemp You Can Feel Products

Our Hemp You Can Feel products reflect our research and development into hemp infused foods and beverages. Our research and development focus are solely on “Industrial Hemp” containing .3% or less of THC. As of the date of this filing, our Hemp You Can Feel Product research and development operations are suspended pending regulatory guidance from the U.S. Food and Drug Administration. We intend to restart our research and development if and when the FDA issues regulatory guidance on the use of hemp and hemp-based CBD.

Our research and development consisted of the following products, none of which are available for sale as of the date of this filing:

•	Hemp You Can Feel™ Alcohol Replacement Cocktail Mixers – This is a line of alcohol-free cocktail mixers marketed online via our own website site and via our marketing partners. All products in this line test as having non-detectable levels of THC.

•	Hemp You Can Feel™ Coffee Products – This is a line of hemp infused coffee products. All products in this line test as having non-detectable levels of THC.

•	Hemp You Can Feel™ Gummies – This is a line of all-natural hemp infused candy products. All products in this line test as having non-detectable levels of THC.

•	Hemp You Can Feel™ Sweeteners – A line of natural and artificial sweeteners.

•	Hemp You Can Feel™ Coffee Pod and Single Serving Beverage Pod Infusion System – Based on internally developed technology and those developed by the Company’s contract research organization, the Company developed product lines consisting of infusion technologies designed to easily and to accurately dose single serving coffee and other beverage pods.

Management Services for Whisper Weed

On July 22, 2020, we signed a management agreement with Whisper Weed, Inc., a California corporation (“Whisper Weed”). Edward Manolos, our director, is a shareholder in Whisper Weed (see “Related Party Transactions”). Whisper Weed conducts licensed delivery of cannabis products in California. The material definitive agreement requires the parties to create a separate entity, CGI Whisper W, Inc. in California as a wholly owned subsidiary of the Company. The business of CGI Whisper W, Inc. will be to provide management services for the lawful delivery of cannabis in the State of California. The Company will manage CGI Whisper W, Inc. operations. In exchange for the Company providing management services to Whisper Weed through the auspices of CGI Whisper W, Inc., the Company will receive as consideration a quarterly fee of 51% of the net profits earned by Whisper Weed. As separate consideration for the transaction, the Company agreed to issue to Whisper Weed $150,000 in the Company’s restricted common stock, valued for purposes of issuance based on the average closing price of the Company’s common stock for the twenty days preceding the entry into the material definitive agreement. Additionally, the Company agreed to amend its articles of incorporation to designate a new class of preferred shares. The preferred class will be designated and issued to Whisper Weed in an amount equal to two times the quarterly payment made to the Company. The preferred shares will be convertible into the Company’s common stock after 6 months and shall be senior to other debts of the Company. The conversion to common stock will be based on a value of common stock equal to at least two times the actual sales for the previous 90 day period The Company agreed to include in the designation the obligation to make a single dividend payment to Whisper Weed equal to 90% of the initial quarterly net profits payable by Whisper Weed. As of February 28, 2022, the Company has not issued the common or preferred shares, and as of the date of this filing the business is in the development stage.

Sales and Marketing

The Company recently began sales and marketing activities for its products, with new products being released for sales on April 21, 2021. The Company primarily plans to market its non-psychoactive products via its own brands and plans to sell its psychoactive products into permitted and licensed entities only within the State of California.

Competition

We operated and are entering markets that are highly competitive.

Relative to our prospects for commercializing polymeric nanoparticles and nanofibers, there are many competitors with various approaches to cannabinoid infusion for foods, beverages and other consumer products. While these currently available technologies are not directly competitive with us, such technologies may be viewed as being directly competitive by the marketplace in the future. Many of the current market participants are well established with considerable financial backing. We expect the quality and composition of the competitive market in the hemp processing environment to continue to evolve as the industry matures. Additionally, increased competition is possible to the extent that new states and geographies enter into the marketplace as a result of continued enactment of regulatory and legislative changes that de-criminalize and regulate cannabis and hemp products, including the 2018 Farm Bill. We believe the contemporaneous growth of the industry as a whole will result in new customers entering the marketplace, thereby further mitigating the impact of competition on our expected operations and results relating to our hemp processing businesses.

Relative to our non-psychoactive cannabis extract powdered drink business currently paused awaiting guidance from the FDA, there are relatively few market participants in this sector, but management of the Company believes the competitive situation will advance quickly over the coming months as new companies target this potentially lucrative market opportunity. Additionally, while large beverage industry participants have yet to launch products in this area, we believe such market entrances are likely as the regulatory environment is clarified by the FDA. This could significantly affect our ability to achieve market success.

We believe the contemporaneous growth of the cannabis beverage sector and the industry as a whole will result in new customers entering the marketplace, thereby further mitigating the impact of competition on our expected operations and results relating to hemp cultivation and processing business and joint venture.

The psychoactive cannabis sector is also highly competitive with many participants being better capitalized. The Company plans to distinguish its products based on both quality and brand appearance.

Employees

As of February 28, 2022, we have three employees, including Arman Tabatabaei, our chief executive officer and chief financial officer. The Company also relies on the services of multiple contractors and service providers that perform various R&D, operational and financial related services for the organization.

Results of Operations

For the Three months Ended February 28, 2022 and February 28, 2021

Company revenues for the quarterly financial period ending February 28, 2022, were $627,390 compared to $25,816 reported during the quarterly financial period ending February 28, 2021. The increase was primarily attributable to several factors, including: 1) inclusion of consolidated revenues after acquiring a controlling position in Natural Plant Extract of California, Inc. 2) reorganization of our distribution business and the signing of new customer accounts, and 3) beginning of contract manufacturing for cannabis products.

During the financial period ending February 28, 2022, cost of goods sold was $767,896 compared to $6,653 for the year earlier period. The increase was mainly attributable the inclusion of consolidated revenues and associated costs of goods sold after acquiring a controlling position in Natural Plant Extract of California, Inc. While the quarterly financial period ending February 28, 2022 reports NPE related revenues, no such revenues and cost of goods sold were included during the quarterly financial period ending February 28, 2021,

During the financial period ending February 28, 2022, the Company increased operating expense to $938,224 from $431,57 for the financial period ending February 28, 2021. These increases were mainly attributable to higher fees for amortization expense related to final purchase price allocation, increase in professional fees. These increases were offset by decreases in general and administrative fees for the financial period ending February 28, 2022 compared to the financial period ending February 28, 2021, respectively. The increase in general and administrative fees was primarily due to the reorganization of business activities after assuming control of NPE.

Interest expenses for the financial period ending November 28, 2022 were $2,487,747 compared to $1,933,728 for the financial period ending February 28, 2021. The increase was attributable to high levels of funding obtain to finance product development and infrastructure in anticipation of increased customer orders and shipments.

During the financial period ending February 28, 2021, net loss was $697,125 compared to net loss of $2,110,770 for the financial period ending February 28, 2021. The net loss in the current period was primarily due to the gain on change in fair value of the derivative liabilities of $1,715,626. The Company also recognized a gain on sale of investments of $10,909, a gain on acquisition of $454,768 and equity investment income of $934,867.

The net loss financial period ending February 28, 2022, results in a loss per share of $0.00, compared to a loss of $0.05 per share during the same period one-year ago.

For the Six months Ended February 28, 2022 and February 28, 2021

Company revenues for the quarterly financial period ending February 28, 2022, were $1,196,952 compared to $30,226 reported during the quarterly financial period ending February 28, 2021. The increase was primarily attributable to several factors, including: 1) inclusion of consolidated revenues after acquiring a controlling position in Natural Plant Extract of California, Inc. 2) reorganization of our distribution business and the signing of new customer accounts, and 3) beginning of contract manufacturing for cannabis products.

During the financial period ending February 28, 2022, cost of goods sold was $1,223,864 compared to $7,953 for the year earlier period. The increase was mainly attributable the inclusion of consolidated revenues and associated costs of goods sold after acquiring a controlling position in Natural Plant Extract of California, Inc. While quarterly financial period ending February 28, 2022 reports NPE related revenues, no such revenues and cost of goods sold were included during the quarterly financial period ending February 28, 2021,

During the financial period ending February 28, 2022, the Company increased operating expense to $1,273,064 from $878,962 for the financial period ending February 28, 2021. These increases were mainly attributable to higher fees for amortization expense related to final purchase price allocation These increases were mainly attributable to higher fees for amortization expense related to final purchase price allocation, increase in professional fees. These increases were offset by decreases in general and administrative fees for the financial period ending February 28, 2022 compared to the financial period ending February 28, 2021, respectively. The increase in general and administrative fees was primarily due to the reorganization of business activities after assuming control of NPE.

Interest expenses for the financial period ending February 28, 2022 were $3,743,233 compared to $2,706,483 for the financial period ending February 28, 2021. The increase was attributable to high levels of funding obtain to finance product development and infrastructure in anticipation of increased customer orders and shipments.

During the financial period ending February 28, 2022, net loss was $329,047 compared to net loss of 2,463,994 for the financial period ending February 28, 2021. The net loss in the current period was primarily due to the gain on change in fair value of the derivative liabilities of $3,488,560. The Company also recognized a gain on sale of investments of $60,967, a gain on acquisition of $454,768 and equity investment income of $934,867.

The net loss financial period ending February 28, 2022, results in a loss per share of $0.00, compared to a loss of $0.06 per share during the same period one-year ago.

Liquidity and Capital Resources

As of February 28, 2022 and August 31, 2021 our cash and cash equivalent balances were $604,001 and $30,813, respectively.

Our primary internal sources of liquidity during the six months ended February 28, 2022 were provided by proceeds from the issuance of convertible notes payable, Series B Convertible preferred stock, and the sale of unregistered common shares of the Company as follows:

We plan to use the proceeds from sales of the primary offering to partially finance our business operations. We also intend to utilize cash on hand, loans and other forms of financing such as the sale of additional equity and debt securities and other credit facilities to conduct our ongoing business, and to also conduct strategic business development and implementation of our business plans generally. We are not intending to use any off-balance sheet financing arrangements.

Other Contractual Obligations

Our Company entered into a one-year lease during August of 2019 for a commercial food production facility located in Los Angeles, California. The one-year lease at a base rate of $3,600 per month through September of 2020. Subsequent to the end of the financial reporting period, ending November 30, 2021, the Company agreed to extend the lease for commercial food production facility located in Los Angeles, California, on a month-to-month basis. As of November 30, 2021, the obligation was completed with the month-to-month contact ending in that date.

On June 5, 2020, the Company entered into an Assignment and Amendment to Commercial Lease Agreement whereby it leased commercial property located at 11116 Wright Road, Los Angeles, CA 90262. The monthly rent is $11,000 per month. The lease terminates on June 30, 2022. The premises is used in connection with NPE’s operations including Cannabis delivery and operation in accordance with applicable city, county and California state law including, but not limited to, the state cannabis licensing and program rules and local ordinances.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a company’s financial condition and results, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Our accounting policies are discussed in detail in the footnotes to our financial statements included in our Annual Report on Form 10-K for the year ended August 31, 2021, however we consider our critical accounting policies to be those related to derivative financial instruments.

Recently Issued Accounting Pronouncements

We review new accounting standards as issued. Although some of these accounting standards issued or effective after the end of our previous fiscal year may be applicable to the Company, we have not identified any standards that we believe merit further discussion. We do not expect the adoption of any recently issued accounting pronouncements to have a significant impact on our financial position, results of operations, or cash flows.

Item 4. Controls and Procedures

Management is responsible for establishing and maintaining adequate disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely and reliable financial reporting and the preparation of financial statements in accordance with accounting principles generally accepted in the United States of America.

As of the quarter ended February 28, 2022, our principal executive officer and principal financial officer completed an assessment of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e), to determine the existence of any material weaknesses or significant deficiencies under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the registrant's financial reporting.

Based on that evaluation, we concluded that our disclosure controls and procedures over financial reporting were not effective as of February 28, 2022.

Changes in Internal Controls over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended February 28, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

The Company is not aware of any pending legal proceedings that will have a material adverse effect on the Company’s business, consolidated financial position, results of operations, or cash flows.

Item 2. Sales of Unregistered Securities

On October 14, 2021, the Company sold 68,500 Preferred Series B shares to an accredited investor, realizing gross proceeds of $68,500, and the agreement was accounted for as a liability based on the terms of the Preferred Series B designation. The shares were unregistered and sold in reliance upon Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. There was no general solicitation in connection with the offer or sale of the preferred Series B shares.

On November 2, 2021, the Company sold 58,500 Preferred Series B shares to an accredited investor, realizing gross proceeds of $58,500, and the agreement was accounted for as a liability based on the terms of the Preferred Series B designation. The shares were unregistered and sold in reliance upon Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. There was no general solicitation in connection with the offer or sale of the preferred Series B shares.

On November 9, 2021, the Company sold 55,000 Preferred Series B shares to an accredited investor, realizing gross proceeds of $55,000, and the agreement was accounted for as a liability based on the terms of the Preferred Series B designation. The shares were unregistered and sold in reliance upon Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. There was no general solicitation in connection with the offer or sale of the preferred Series B shares.

On January 3, 2022, the Company issued a promissory note for proceeds of $100,000 at 10% per annum with a maturity date of January 3, 2023. The principal amount and the guaranteed interest shall be due an payable in seven equal monthly payment of $15,714, commencing on June 3, 2022 and continuing until maturity date. In the event of default, the note is convertible into shares of common stock of the Company based on 90% of the lowest trading price during the previous 10 days. The Company also issued the lender 3,000,000 shares of common stock.

On January 6, 2022, the Company sold a convertible note to an accredited investor for proceeds of $120,000 at 8% per annum with a maturity date of January 6, 2023 with a Variable Conversion Price at a discount rate of 40% for the lowest Trading Prices for the Common Stock during the fifteen (15) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date.

On December 20, 2021, the Company sold 45,500 Preferred Series B shares to an accredited investor, realizing gross proceeds of $45,500, and the agreement was accounted for as a liability based on the terms of the Preferred Series B designation. The shares were unregistered and sold in reliance upon Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. There was no general solicitation in connection with the offer or sale of the preferred Series B shares.

On January 14, 2022, the Company sold 50,000 Preferred Series B shares to an accredited investor, realizing gross proceeds of $50,000, and the agreement was accounted for as a liability based on the terms of the Preferred Series B designation. The shares were unregistered and sold in reliance upon Section 4(2) of the Securities Act of 1933, and Rule 506 of Regulation D promulgated thereunder, with respect to the issuance of the restricted stock. There was no general solicitation in connection with the offer or sale of the preferred Series B shares.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information.

None.

Item 6. Exhibits

	Corporate Documents Section

3	Certificate of Incorporation	Incorporated by reference to the Company’s Form S-1 filed on August 26, 2019.

3i	Amendment to Certificate of Incorporation	Incorporated by reference from the Company’s Form S-1 filed on June 5, 2020

3i	Amendment to Certificate of Incorporation	Incorporated by reference from the Company’s Form 8-K filed on June 23, 2021

3i	Amendment to Certificate of Incorporation	Incorporated by reference from the Company’s Form 8-K filed October 19, 2021

3i	Amendment to Certificate Incorporation	Incorporated by reference from the Company’s Form 8-K filed January 12, 2022

3.ii	By Laws	Incorporated by reference from the Company’s Form S-1/A filed on September 9, 2019

10.1	Distribution Agreement	Incorporated by reference from the Company’s Form 8-K filed November 12, 2021

31.1	Certification of Principal Executive Officer Pursuant to Rule 13a-14	Filed Herewith

31.2	Certification of Principal Financial Officer Pursuant to Rule 13a-14	Filed Herewith

32.1	CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act	Filed Herewith

101.INS	iXBRL Instance Document	Filed Herewith
101.PRE	iXBRL Taxonomy Extension Presentation Linkbase	Filed Herewith
101.LAB	iXBRL Taxonomy Extension Label Linkbase	Filed Herewith
101.DEF	iXBRL Taxonomy Extension Definition Linkbase	Filed Herewith
101.CAL	iXBRL Taxonomy Extension Calculation Linkbase	Filed Herewith
101.SCH	iXBRL Taxonomy Extension Schema	Filed Herewith

* Filed herewith

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.

April 19, 2022

	Cannabis Global, Inc.

	By:	/s/ Arman Tabatabaei
		Arman Tabatabaei President, Chief Executive Officer, Chief Financial Officer, Director

CANNABIS GLOBAL, INC. 10-Q