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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark one)

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

For the fiscal year ended August 31, 2023

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

For the transition period from _______________ to ________________________

Commission File No. 000-55852

INNOVATION1 BIOTECH INC.

(Exact name of registrant as specified in its charter)

Nevada		82-2275255
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7 Grand View Avenue

Somerville, MA 02143

(Address of principal executive offices, zip code)

+1 (617) 447-8299

(Registrant’s telephone number, including area code)

179 Rte 46W, Suite 15 #147Rockaway, New Jersey 07866

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

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

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

none

not applicable

Securities registered pursuant to section 12(g) of the Act:

Common stock, $.001 par value

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

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

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☒ No ☐

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, as of February 28, 2023, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $6,243,650 based upon the last sales price of the common stock as of such date. Solely for purposes of this disclosure, shares of common stock held by executive officers, directors and beneficial holders of 10% or more of the outstanding common stock of the registrant as of such date have been excluded because such persons may be deemed to be affiliates.

At January 12, 2024, there were 22,470,239 shares of the registrant’s common stock, par value $0.001 per share outstanding.

INNOVATION1 BIOTECH INC.

TABLE OF CONTENTS

		Page No.

PART I

Item 1.	Business	4
Item 1A.	Risk Factors	4
Item 1B.	Unresolved Staff Comments	14
Item 2.	Properties	14
Item 3.	Legal Proceedings	14
Item 4.	Mine Safety Disclosures	14

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	15
Item 6.	Selected Financial Data	15
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	18
Item 8.	Financial Statements	19
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	38
Item 9A.	Controls and Procedures	36
Item 9B.	Other Information	39

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	40
Item 11.	Executive Compensation	42
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	43
Item 13.	Certain Relationships and Related Transactions, and Director Independence	44
Item 14.	Principal Accounting Fees and Services	44

PART IV

Item 15.	Exhibits and Financial Statement Schedules	45
Item 16.	Form 10-K Summary	45
	Signatures	46

Table of Contents

CAUTIONARY NOTE REGARDING FORWARDING LOOKING STATEMENTS

This report contains forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “aim,” “will,” “would,” “could,” and similar expressions or phrases identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and future events and financial trends that we believe may affect our financial condition, results of operation, business strategy and financial needs. Forward-looking statements include, but are not limited to, statements about risks associated with:

•

Risks related to our business, including:

	·	we have a history of losses;
	·	our auditors have raised substantial doubts about our ability to continue as a going concern;
	·	we have a working capital deficit and need to raise additional capital to continue our business model;
	·	we are a shell company and lack current business operations; and
	·	our reliance on our one officer.

•

Risks related to the ownership of our securities, including:

	·	the applicability of penny stock rules; and
	·	material weaknesses in our internal controls over financial reporting; and
	·	the significant dilution to our stockholders upon the conversion of the outstanding Series B Convertible Preferred Stock.

You should read thoroughly this report and the documents that we refer to herein with the understanding that our actual future results may be materially different from and/or worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements including those made in this Annual Report on Form 10-K. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.

All references in this Form 10-K to the “Company”, “Innovation1 Biotech Inc.,” “Innovation1”, “we”, “us,” or “our” are to Innovation1 Biotech Inc. (formerly “Gridiron BioNutrients, Inc.”), a Nevada corporation and our former wholly-owned subsidiary Gridiron Ventures, Inc., a Nevada corporation, which was dissolved in April 2022.

Table of Contents

PART I

ITEM 1. BUSINESS

Corporate Overview

Innovation1 Biotech Inc. (the "Company" or "we") was incorporated under the laws of the State of Nevada. The Company currently has no operations and is evaluating a number of strategic alternatives including, but not limited to, seeking to acquire a new business in the United States, including potentially by means of a reverse merger with an operating entity. We have not generated revenues in fiscal 2022 or fiscal 2023 and do not expect to do so in the short-term.

On November 9, 2021, the Company completed its acquisition of all of the assets, including intellectual property assets, relating to Mioxal^®, a nutraceutical complex composed of essential amino acids, natural coenzymes and minerals, held by ST Biosciences, Ltd., a company organized under the laws of England and Wales.

On November 7, 2022, the Company completed the disposition of all of the assets, including intellectual property assets, relating to Mioxal®, a nutraceutical complex composed of essential amino acids, natural coenzymes, and minerals to Ingenius Biotech S.L., a corporation organized under the laws of Spain (“Ingenius”). The disposition was completed pursuant to the terms of the Agreements Relating to the Transfer of the Mioxal Product dated November 7, 2022, (the “Disposition Agreement”), described in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on November 14, 2022. Pursuant to the terms of the Disposition Agreement, Ingenius received 350,000 shares of the Company’s common stock and Ingenius agreed to pay the Company (i) $100,000 on the earlier of Ingenius’ sale, assignment, license, or other transfer of the Mioxal® product or Ingenius’ first sale or other commercialization of the Mioxal® product; and (ii) royalties in the amount of 5% of Worldwide Net Sales, as defined in the Disposition Agreement, beginning on the first sale of the Mioxal® product and ending on the 18-month anniversary of the expiration of the last remaining patent covering the Mioxal® product. Further, Ingenius agreed to release the Company from all of its liabilities and obligations relating to the Mioxal® product and indemnify the Company from all claims relating to the Mioxal® product following the date of the Disposition Agreement. As of the date of the filing this report the Company has received neither the $100,000 payment nor any royalties from Worldwide Net Sales. The Company does not expect to receive any payments in the future.

The foregoing description of the Disposition Agreement is qualified in its entirety by reference to the full text of the Disposition Agreement filed hereto as Exhibit 10.11.

At present, the Company has no sources of revenue and has no specific business plan or purpose. The Company’s business plan is to seek a business combination. As a result, the Company is a “shell” company. See the Risk Factors below. Although the Company has been in discussions with potential partners or targets, it has not entered into any definitive agreements. The evaluation and selection of a business opportunity is a complex and uncertain process, and the Company not yet identified a target operating business for acquisition. Business opportunities that we believe are in the best interests of the Company and its shareholders may be scarce, or we may be unable to attract the businesses we identify as viable for our objectives, including due to competitive forces in the marketplace beyond our control. There is no assurance that we will be able to locate compatible business opportunities for the Company. See Risk Factors below.

Our History

The Company was incorporated in 2014 as “My Cloudz, Inc.” in the state of Nevada. In October 2017, the Company entered into a share exchange agreement to effectuate a reverse acquisition of GridIron BioNutrients, Inc. In November 2017, the Company changed its name from “MyCloudz, Inc.” to “GridIron BioNutrients, Inc.”. In March 2022, the Company changed its name to “Innovation1 Biotech, Inc.”

Competition and Market Conditions

We will face substantial competition in our efforts to identify and pursue a business partner. The primary source of competition is expected to be from other companies organized and funded for similar purposes, including small venture capital firms, blank check companies, and wealthy investors, many of which may have substantially greater financial and other resources than we do. Considering our limited financial and human resources, unless we find a partner that wants to utilize our current intellectual property, we are at a competitive disadvantage compared to many of our competitors in our efforts to obtain an operating business or assets necessary to commence our operations in a new field. Additionally, with continued economic uncertainty primarily caused by global economic conditions and conflicts and inflation and higher interest rates, many venture capital firms and similar firms and individuals have been seeking to acquire businesses at discounted rates, and we therefore currently face additional competition and resultant difficulty obtaining a business. We expect these conditions to persist at least until such time as the economy recovers. Further, even if we are successful in obtaining a business or assets for new operations, we expect there to be enhanced barriers to entry in the marketplace in which we decide to operate because of reduced demand and/or increased raw material costs caused by the pandemic and other economic forces that are beyond our control.

In order for us to be attractive to a business partner or opportunity, we will need to convince our outstanding debt holders, most of whom are currently funding the Company’s ability to remain a reporting company, to convert their outstanding debt into common stock upon the closing of any such transaction. If any of them are unwilling to do so, our ability to close a transaction will be adversely affected. Any such acquisition would be made using the Company’s common stock as currency to fund such acquisition.

Table of Contents

Human/Capital Employees

As of January 12, 2024, we had 2 officers and 3 directors and 0 employees. Provided we have the resources, we intend to expand our current management to attract and retain skilled directors, officers, and employees with experience relevant to our business focus.

ITEM 1A. RISK FACTORS

An investment in our common stock involves several significant risks. You should carefully consider the following risks and uncertainties in addition to other information in this report in evaluating our company and its business before purchasing our securities. Our business, operating results and financial condition could be seriously harmed because of the occurrence of any of the following risks. You could lose all or part of your investment due to any of these risks.

We have a history of losses, we expect to incur losses in the future and we may not be able to achieve or maintain profitability.

We incurred net operating losses of $5,988,266 and $40,877,813 respectively, for the years ended August 31, 2023, and 2022. At August 31, 2023, we had an accumulated deficit of $58,630,438. We do not generate any revenues to provide funds to pay our operating expenses or satisfy our obligations. We currently have no ability to generate our revenues to support our operations.

Our auditors have raised substantial doubts as to our ability to continue as a going concern.

Our consolidated financial statements appearing later in this report have been prepared assuming we will continue as a going concern. We have sustained recurring losses from operations and have a net capital deficiency. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We have experienced recurring operating losses over the last two years and have a significant accumulated deficit. We expect to continue to generate operating losses and consume significant cash resources for the foreseeable future. Without additional financing, these conditions raise substantial doubt about our ability to continue as a going concern, meaning that we may be unable to continue operations for the foreseeable future or realize assets and discharge liabilities in the ordinary course of operations. If we seek additional financing to fund our business activities in the future and there remains doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding on commercially reasonable terms or at all. If we are unable to obtain sufficient funding, our business, prospects, financial condition and results of operations will be materially and adversely affected, and we may be unable to continue as a going concern. If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our consolidated financial statements, and it is likely that investors will lose all or a part of their investment.

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We have a working capital deficit at August 31, 2023, and 2022. We need to raise additional capital.

At August 31, 2023, we had a cash balance of $49,849 and a working capital deficit of $3,214,213 compared to a cash balance of $156,486 and a working capital deficit of $29,525,460 at August 31, 2022. We used $620,195 in net cash in our operations in the year ended August 31, 2023, as compared to $3,127,852 in net cash used in our operations in the year ended August 31, 2022. The decrease in working capital from August 31, 2022, resulted from the disposition of Mioxal assets and liabilities, this was offset by an increase in our accounts payable, accrued expenses, and the dividends payable. Our principal sources of liquidity are sales of equity and debt securities. As we are a shell company whose stock is quoted on the OTC Markets, we expect to encounter difficulty in raising working capital upon terms and conditions satisfactory to us, if at all. There is no assurance that we will be successful in obtaining funding to continue operations. In that event, we may be unable to continue as a going concern.

We may face difficulties or delays in our search for a business combination, and we may not have access to sufficient capital to consummate a business combination.

We may face difficulty identifying a viable business opportunity or negotiating or paying for any resulting business combination. Economic factors that are beyond our control, including inflation and higher interest rates and economic uncertainty, as well as increased competition for acquisitions of operating entities that we expect to encounter as a result thereof, may hinder our efforts to locate and/or obtain a business that is suitable for our business goals at a price we can afford and on terms that will enable us to sufficiently grow our business to generate value to our shareholders. We have limited capital, and we may not be able to take advantage of any available business opportunities on favorable terms or at all due to the limited availability of capital. There can be no assurance that we will have sufficient capital to provide us with the necessary funds to successfully develop and implement our plan of operation or acquire a business we deem to be appropriate or necessary to accomplish our objectives, in which case we may be forced to terminate our business plan and your investment in the Company could become worthless.

If we are not successful in acquiring a new business and generating material revenues, investors will likely lose their investment.

If we are not successful in developing a viable business plan and acquiring a new business through which to implement it, our investors’ entire investment in the Company could become worthless. Even if we are successful in combining with or acquiring the assets of an operating entity, we can provide no assurances that the Company will be able to generate significant revenue therefrom in the short-term or at all or that investors will derive a profit from their investment. If we are not successful, our investors will likely lose their entire investment.

Because we have no capital, we may need to raise additional capital in the future by issuing debt or equity securities, the terms of which may dilute our current investors and/or reduce or limit their liquidation or other rights.

We may require additional capital to acquire a business. We may not be able to obtain additional capital when required. Future business development activities, as well as administrative expenses such as salaries, insurance, general overhead, legal and compliance expenses and accounting expenses will require a substantial amount of additional capital.

The terms of securities we issue in future capital raising transactions may be more favorable to new investors, and may include liquidation preferences, superior voting rights or the issuance of other derivative securities, which could have a further dilutive effect on or subordinate the rights of our current investors. Any additional capital raised through the sale of equity securities will likely dilute the ownership percentage of our shareholders. Additionally, any debt securities we issue would likely create a liquidation preference superior that of our current investors and, if convertible into shares of common stock, would also pose the risk of dilution.

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We may encounter difficulty locating and consummating a business combination, including as a result of the competitive disadvantages we have as a shell company.

We expect to face intense competition in our search for a revenue-producing business to combine with or acquire. Given the current economic climate, venture capital firms, larger companies, and other investors are purchasing operating entities or the assets thereof in high volumes and at relatively discounted prices. These parties may have greater capital or human resources than we do and/or more experience in a particular industry within which we choose to search. Most of these competitors have a certain amount of liquid cash available to take advantage of favorable market conditions for prospective business purchaser such as those caused by the recent pandemic. Any delay or inability to locate, negotiate and enter into a business combination as a result of the relative illiquidity of our current asset or other disadvantages we have relative to our competitors could cause us to lose valuable business opportunities to our competitors, which would have a material adverse effect on our business.

We may expend significant time and capital on a prospective business combination that is not ultimately consummated.

The investigation of each specific target business and any subsequent negotiation and drafting of related agreements, SEC disclosure and other documents will require substantial amounts of management’s time and attention and material additional costs in connection with outsourced services from accountants, attorneys and other professionals. We will likely expend significant time and resources searching for, conducting due diligence on, and negotiating transaction terms in connection with a proposed business combination that may not ultimately come to fruition. Unanticipated issues which may be beyond our control or that of the seller of the applicable business may arise that force us to terminate discussions with a target company, such as the target’s failure or inability to provide adequate documentation to assist in our investigation, a party’s failure to obtain required waivers or consents to consummate the transaction as required by the inability to obtain the required audits, applicable laws, charter documents and agreements, the appearance of a competitive bid from another prospective purchaser, or the seller’s inability to maintain its operations for a sufficient time to allow the transaction to close. Such risks are inherent in any search for a new business and investors should be aware of them before investing in an enterprise such as ours.

We may engage in a business combination that causes tax consequences to us and our shareholders.

Federal and state tax consequences will, in all likelihood, be a significant factor in considering any business combination that we may undertake. Under current federal law, such transactions may be subject to significant taxation to the buyer and its shareholders under applicable federal and state tax laws. While we intend to structure any business combination so as to minimize the federal and state tax consequences to the extent practicable in accordance with our business objectives, there can be no assurance that any business combination we undertake will meet the statutory or regulatory requirements of a tax-free reorganization or similar favorable treatment or that the parties to such a transaction will obtain the tax treatment intended or expected upon a transfer of equity interests or assets. A non-qualifying reorganization, combination or similar transaction could result in the imposition of significant taxation, both at the federal and state levels, which may have an adverse effect on both parties to the transaction, including our shareholders.

It is unlikely that our shareholders will be afforded any opportunity to evaluate or approve a business combination.

It is unlikely that our shareholders will be afforded the opportunity to evaluate and approve a proposed business combination. In most cases, business combinations do not require shareholder approval under applicable law, and our Articles of Incorporation and Bylaws do not afford our shareholders with the right to approve such a transaction. In order to develop and implement our business plan, we may in the future hire lawyers, accountants, technical experts, appraisers, or other consultants to assist with determining the Company’s direction and consummating any transactions contemplated thereby. We may rely on such persons in making difficult decisions in connection with the Company’s future business and prospects. The selection of any such persons will be made by our Board, and any expenses incurred, or decisions made based on any of the foregoing could prove to be adverse to the Company in hindsight, the result of which could be diminished value to our shareholders.

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We may attempt to complete a business combination with a private target company about which little information is available, and such target entity may not generate revenue as expected or otherwise by compatible with us as expected.

In pursuing our search for a business to acquire, we will likely seek to complete a business combination with a privately held company. Very little public information generally exists about private companies, and the only information available to us prior to making a decision may be from documents and information provided directly to us by the target company in connection with the transaction. Such documents or information or the conclusions we draw therefrom could prove to be inaccurate or misleading. As such, we may be required to make our decision on whether to pursue a potential business combination based on limited, incomplete or faulty information, which may result in our subsequent operations generating less revenue than expected, which could materially harm our financial condition and results of operations.

Our ability to assess the management of a prospective target business may be limited and, as a result, we may acquire a target business whose management does not have the skills, qualifications or abilities to enable a seamless transition, which could, in turn, negatively impact our results of operations.

When evaluating the desirability of a potential business combination, our ability to assess the target business’s management may be limited due to a lack of time, resources or information. Our management’s assessment of the capabilities of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities expected. Further, in most cases the target’s management may be expected to want to manage us and replace our Chief Executive Officer. Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company or assist with their former entity’s merger or combination into ours, the operations and profitability of the post-acquisition business may be negatively impacted, and our shareholders could suffer a reduction in the value of their shares.

Changes in laws or regulations, or a failure to comply with the laws and regulations applicable to us, may adversely affect our business, ability to negotiate and complete a business combination, and results of operations.

We are subject to laws and regulations enacted by federal, state and local governments. In addition to SEC regulations, any business we acquire in the future may be subject to substantial legal or regulatory oversight and restrictions, which could hinder our growth and expend material amounts on compliance. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application by courts and administrative judges may also change from time to time, and any such changes could be unfavorable to us and could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could result in material defense or remedial costs and/or damages have a material adverse effect on our financial condition.

Due to factors beyond our control, our stock price will be volatile.

There is currently no market for our common stock, and there can be no guarantee that an active market for our common stock will develop once we begin trading, even if we are successful in consummating a business combination. Further, even if an active market for our common stock develops, it will likely be subject to significant price volatility when compared to more seasoned issuers. We expect that the price of our common stock will be more volatile than more seasoned issuers for the foreseeable future. Fluctuations in the price of our common stock and market volatility can be based on various factors in addition to those otherwise described in this report, including:

●	A prospective business combination and the terms and conditions thereof;

●	The operating performance of any business we acquire, including any failure to achieve material revenues therefrom;

●	The performance of our competitors in the marketplace, both pre- and post-combination;

●	The public’s reaction to our press releases, SEC filings, website content and other public announcements and information;

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●	Changes in earnings estimates of any business that we acquire or recommendations by any research analysts who may follow us or other companies in the industry of a business that we acquire;

●	Variations in general economic conditions, including as may be caused by uncontrollable events such as future pandemics and global conflicts;

●	The public disclosure of the terms of any financing we disclose in the future;

●	The long duration of the period of time that our common stock quotation was halted;

●	The number of shares of our common stock that are publicly traded in the future; and

Many of these factors are beyond our control and may decrease the market price of our common stock, regardless of whether we can consummate a business combination and of our current or subsequent operating performance and financial condition. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been instituted. A securities class action suit against us could result in substantial costs and divert our management’s time and attention, which would otherwise be used to benefit our business.

Future issuance of our common stock could dilute the interests of our existing shareholders, particularly in connection with an acquisition and any resulting financing.

We may issue additional shares of our common stock in the future. The issuance of a substantial amount of our common stock could substantially dilute the interests of our shareholders. In addition, the sale of a substantial amount of common stock in the public market, either in the initial issuance or in a subsequent resale by the target company in a business combination which received our common stock as consideration or by investors who has previously acquired such common stock could have an adverse effect on the market price of our common stock.

Our registration under the Securities Exchange Act of 1934 could be revoked by the Securities and Exchange Commission if we fail to file required reports.

If we fail to file reports as required under the Exchange Act, we may lose our registration. While we intend to comply with the Exchange Act’s reporting requirements moving forward, and we may be unable to comply in the future as we did in the past. For example, this report was delinquently filed. If we are unable to comply with the SEC reporting provisions in the future, such failure will affect the liquidity of our common stock and act as a depressant to the price. We cannot assure you we will not become delinquent again.

We are subject to the “penny stock” rules which will adversely affect the liquidity of our common stock.

The SEC has adopted regulations which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share, subject to specific exemptions. We do not expect our stock price to be above $5.00 in the foreseeable future. The “penny stock” designation will require any broker-dealer selling our securities to disclose certain information concerning the transaction, obtain a written agreement from the purchaser and determine that the purchaser is reasonably suitable to purchase the securities. These rules will limit the ability of broker-dealers to solicit purchases of our common stock and therefore reduce the liquidity of the public market for our shares.

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Broker-dealers are increasingly reluctant to permit investors to buy or sell speculative unlisted stock and often impose costs which make it uneconomical for small shareholders to do so. Moreover, as a result of apparent regulatory pressure from the SEC and the Financial Industry Regulatory Authority (“FINRA”), a growing number of broker-dealers decline to permit investors to purchase and sell or otherwise make it difficult to sell shares of penny stocks. The “penny stock” designation may have a depressive effect upon our common stock price once we are trading.

As a shell company, our shareholders may face significant restrictions on the resale of our common stock due to state blue sky laws.

Because our business focus is to locate and acquire an operating business, and our Common Stock meets the definition of a “penny stock”, unless and until we acquire an operating business, certain state regulations may adversely affect the transferability of our Common Stock. Specifically, a number of state regulators have adopted laws or regulations which limit or preclude the applicability of exemptions from state registration for secondary transactions in securities of shell companies, rendering it more difficult or potentially even impossible to sell our securities in the applicable states. Current shareholders, and persons who desire to purchase the Common Stock, should be aware that there may be significant state restrictions upon the ability of new investors to purchase the Common Stock by virtue of our status as a shell company, in addition to other characteristics of our Company and securities.

Our disclosure controls and procedures and internal control over financial reporting are not effective, which may cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.

Our management evaluated our disclosure controls and procedures as of August 31, 2023, and concluded that as of that date, our disclosure controls and procedures were not effective. In addition, our management evaluated our internal control over financial reporting as of August 31, 2023, and concluded that that there were material weaknesses in our internal control over financial reporting as of that date and that our internal control over financial reporting was not effective as of that date. A material weakness is a control deficiency, or combination of control deficiencies, such that there is a reasonable possibility that a material misstatement of the financial statements will not be prevented or detected on a timely basis.

We have not yet remediated these material weaknesses and we believe that our disclosure controls and procedures and internal control over financial reporting continue to be ineffective. Until these issues are corrected, our ability to report financial results or other information required to be disclosed on a timely and accurate basis may be adversely affected and our financial reporting may continue to be unreliable, which could result in additional misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision.

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results. As a result, current and potential shareholders could lose confidence in our financial reporting, which would harm our business and the trading price of our stock.

Our management has previously determined that we did not maintain effective internal controls over financial reporting. For a detailed description of these material weaknesses and our remediation efforts and plans, see “Controls and Procedures”. If the result of our remediation of the identified material weaknesses is not successful, or if additional material weaknesses are identified in our internal control over financial reporting, our management will be unable to report favorably as to the effectiveness of our internal control over financial reporting and/or our disclosure controls and procedures, and we could be required to further implement expensive and time-consuming remedial measures and potentially lose investor confidence in the accuracy and completeness of our financial reports which could have an adverse effect on our stock price and potentially subject us to litigation.

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There is currently a limited public market for our common stock, a trading market for our common stock may never develop, and our common stock prices may be volatile and could decline substantially.

Our shares are currently traded on the over-the-counter market, with quotations entered for our common stock on the OTCQB under the symbol “IVBT.” However, the volume of trading in our common stock is currently limited. In these marketplaces, our stockholders may find it difficult to obtain accurate quotations as to the market value of their shares of our common stock and may find few buyers to purchase their stock and few market makers to support its price. As a result of these and other factors, investors may be unable to resell shares of our common stock at or above the price for which they purchased them, at or near quoted bid prices, or at all. Further, an inactive market may also impair our ability to raise capital by selling additional equity in the future and may impair our ability to enter into strategic partnerships or acquire companies or products by using shares of our common stock as consideration. Some, but not all, of the factors which may delay or prevent the listing of our common stock on a more widely-traded and liquid market include the following: our stockholders’ equity may be insufficient; the market value of our outstanding securities may be too low; our net income from operations may be too low; our common stock may not be sufficiently widely held; we may not be able to secure market makers for our common stock; and we may fail to meet the rules and requirements mandated by the several exchanges and markets to have our common stock listed. Should we fail to satisfy the initial listing standards of the national exchanges, or our common stock is otherwise rejected for listing, and remains listed on the OTC Markets or is suspended from the OTC Markets, the trading price of our common stock could suffer and the trading market for our common stock may be less liquid, and our common stock price may be subject to increased volatility.

Therefore, an active, liquid, and orderly trading market for our common stock may not initially develop or be sustained, which could significantly depress the public price of our common stock and/or result in significant volatility, which could affect your ability to sell your common stock. Even if an active trading market develops for our common stock, the market price of our common stock may be highly volatile and subject to wide fluctuations. Our financial performance, government regulatory action, tax laws, interest rates and market conditions in general could have a significant impact on the future market price of our common stock.

Because our common stock is a penny stock, stockholders may be further limited in their ability to sell their shares.

The SEC has adopted Rule 3a51-1, which establishes the definition of a “penny stock” as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. Our shares constitute a penny stock under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and are expected to remain classified as a penny stock for the foreseeable future. Classification as a penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, which makes it more difficult for a purchaser to liquidate his or her investment. Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares will be subject to Rules 15g-2 through 15g-9 of the Exchange Act. Rather than having to comply with these rules, some broker-dealers will refuse to attempt to sell a penny stock.

We are not subject to the rules of a national securities exchange requiring the adoption of certain corporate governance measures and, as a result, our stockholders do not have the same protections.

We are quoted on the OTCQB marketplace and are not subject to the rules of a national securities exchange, such as the New York Stock Exchange or the Nasdaq Stock Market. National securities exchanges generally require more rigorous measures relating to corporate governance designed to enhance the integrity of corporate management. The requirements of the OTCQB afford our stockholders fewer corporate governance protections than those of a national securities exchange. Until we comply with such greater corporate governance measures, regardless of whether such compliance is required, our stockholders will have fewer protections such as those related to director independence, stockholder approval rights and governance measures designed to provide board oversight of management.

Because we are a “smaller reporting company,” we will not be required to comply with certain disclosure requirements that are applicable to other public companies, and we cannot be certain if the reduced disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors.

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We are a “smaller reporting company,” as defined in Item 10(f)(1) of Regulation S-K. As a smaller reporting company, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not smaller reporting companies, including, but not limited to:

	·	Reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements;
	·	Not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002; and
	·	Reduced disclosure obligations for our annual and quarterly reports, proxy statements and registration statements.

We will remain a smaller reporting company until the end of the fiscal year in which (1) we have a public common equity float of more than $250 million, or (2) we have annual revenues for the most recently completed fiscal year of more than $100 million plus we have any public common equity float or public float of more than $700 million. We also would not be eligible for status as smaller reporting company if we become an investment company, an asset-backed issuer or a majority-owned subsidiary of a parent company that is not a smaller reporting company.

We do not expect to pay any cash dividends to the holders of the common stock in the foreseeable future and the availability and timing of future cash dividends, if any, is uncertain.

We expect to use cash flow from future operations to repay debt and support the growth of our business and do not expect to declare or pay any cash dividends on our common stock in the foreseeable future. Subject to such restrictions, our board of directors will determine the amount and timing of stockholder dividends, if any, that we may pay in future periods. In making this determination, our directors will consider all relevant factors, including the amount of cash available for dividends, capital expenditures, covenants, prohibitions or limitations with respect to dividends, applicable law, general operational requirements and other variables. We cannot predict the amount or timing of any future dividends you may receive, and if we do commence the payment of dividends, we may be unable to pay, maintain or increase dividends over time. Therefore, you may not be able to realize any return on your investment in our common stock for an extended period of time, if at all.

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We may issue preferred stock whose terms could adversely affect the voting power or value of our common stock.

Our certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences over our common stock with respect to dividends and distributions, as our board of directors may determine. The terms of one or more classes or series of preferred stock could adversely impact the voting power or value of our common stock. For example, we might grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events, or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we might grant to holders of preferred stock could affect the value of the common stock.

We will continue to incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives.

As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act of 2002 and rules subsequently implemented by the SEC, impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management and other personnel devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly, particularly after we are no longer a smaller reporting company. For example, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance.

We will continue to incur significant costs in staying current with reporting requirements. Our management will be required to devote substantial time to compliance initiatives. Additionally, the lack of an internal audit group may result in material misstatements to our financial statements and ability to provide accurate financial information to our shareholders.

Our management and other personnel will need to devote a substantial amount of time to compliance initiatives to maintain reporting status. Moreover, these rules and regulations, which are necessary to remain as a public reporting company, will be costly because external third-party consultant(s), attorneys, or other firms may have to assist us in following the applicable rules and regulations for each filing on behalf of the Company.

We currently do not have an internal audit group, and we may eventually need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge to have effective internal controls for financial reporting.

Moreover, if we are not able to comply with the requirements or regulations as a public reporting company in any regard, we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

None.

ITEM 3. LEGAL PROCEEDINGS

The Company could become a party to various legal actions arising in the ordinary course of business. Matters that are probable of unfavorable outcomes to the Company and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, the Company’s estimates of the outcomes of such matters and its experience in contesting, litigating and settling similar matters. With the exception of the following, as of the date of this report, there are no pending legal proceedings to which the Company is a party or of which any of their property is the subject, nor are there any such proceedings known to be contemplated by governmental authorities.

On September 30, 2022, a party identified as New You Inc. filed a complaint with the District Court of Clark County, Nevada against Innovation 1 Biotech, Inc, ST Biosciences LTD, Jeffrey Kraws and Jason Frankovich. The complaint alleges that during Mr. Frankovich’s service to New You Inc. as Chairman of the Board of Directors, concurrent with Mr. Frankovich’s and Mr. Kraws’s services as executives of ST Biosciences LTD, Mr. Frankovich converted funds away from New You Inc. to satisfy obligations of ST Biosciences LTD and/or Innovation1 and/or to enrich Frankovich and Kraws. The amount of the claim is a total of $249,020 plus damages in excess of $30,000 and includes a claim for legal fees. The Company’s legal firm has evaluated the claims of the complaint and together with Innovation1 management believes the claims to be without merit. The Company intends to defend against the complaint and believes any potential liability to be $0.

40 Wall Street Suites LLC.

On December 19, 2022, a party identified as 40 Wall Street Suites LLC., filed a complaint with the Supreme Court of New York County, New York against Innovation1 Biotech, Inc. The complaint alleges that Innovation1 failed to pay the December lease payment and therefore is responsible for payment of the remaining lease plus interest. The Company defended against the complaint; however, had accrued a potential liability of $484,668 at May 31, 2023, see Note 6 – Lease Liability below.

On September 28, 2023, the Company entered into a settlement agreement with 40 Wall Street Suites LLC. on its past due lease payment. The agreement calls for the Company to pay 40 Wall Street Suites LLC. a total of $40,000 as follows: (i) $20,000 within 15 days of complete execution of this letter agreement, and (ii) $20,000 within 45 days of complete execution of this letter agreement. In addition, the Company agrees and acknowledges that 40 Wall Street Suites LLC. shall be entitled to retain the security deposit previously made. In exchange for the payments and the related agreements 40 Wall Street Suites LLC. agrees not to take any action to pursue the litigation.

Greenfingers LLC A/A/O Simon D. Roffe

On April 21, 2023, a party identified as Greenfingers LLC A/A/O Simon D. Roffe, entered into a judgement in the Supreme Court of New York County, New York against Innovation1 Biotech Inc. in the amount of $264,617 plus post-judgement interest from the date of entry for failure to turn over shares of Jason Frankovich, a former director of the Company.

On October 3, 2023, the Company entered into a settlement agreement with Greenfingers LLC A/A/O Simon D. Roffe. The agreement calls for the Company to pay Greenfingers LLC A/A/O Simon D. Roffe $20,000 upon complete execution of the settlement agreement. In addition, Innovation1 shall issue Greenfingers LLC A/A/O Simon D. Roffe 2,000,000 restricted shares of common stock.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

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PART II

Market Information

Our common stock is quoted on the OTCQB Tier of the OTC Markets Group, Inc. under the stock symbol “IVBT.” On August 31, 2023, the last reported sale price of our common stock on the OTCQB was $0.85 per share. As of August 31, 2023, there were 134 holders of record of our common stock.

Dividends

The payment of dividends, if any, in the future, rests within the sole discretion of our board of directors. The payment of dividends will depend upon our earnings, our capital requirements and our financial condition, as well as other relevant factors. We have not declared any cash dividends since our inception and have no present intention of paying any cash dividends on our common stock in the foreseeable future.

Transfer Agent

Our transfer agent is Empire Stock Transfer, Inc. (“Empire Stock Transfer”), whose address 1859 Whitney Mesa Dr., Henderson, Nevada 89014. Empire Stock Transfer’s telephone number is (702) 818-5898.

Recent Sales of Unregistered Securities

None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

ITEM 6. SELECTED FINANCIAL DATA

Not Applicable.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations, and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements because of several factors, including those set forth under the Part I, Item 1A, Risk Factors and Business sections in this Annual Report. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characterizations of future events or circumstances are forward-looking statements. Such statements are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this annual report on Form 10-K.

Overview

The Company currently has no sources of revenue and has no specific business plan or purpose. The Company’s business plan is to seek a business combination. The evaluation and selection of a business opportunity is a complex and uncertain process, and the Company not yet identified a target operating business for acquisition. Business opportunities that we believe are in the best interests of the Company and its shareholders may be scarce, or we may be unable to attract the businesses we identify as viable for our objectives, including due to competitive forces in the marketplace beyond our control. There is no assurance that we will be able to locate compatible business opportunities for the Company.

Going Concern and Cash Flows

Our financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company had no revenue and a net operating loss of $5,988,266 for the fiscal year ended August 31, 2023. The Company has working capital deficit of $3,214,213 and an accumulated deficit of $58,630,438 as of August 31, 2023. We do not have sufficient funds to support our daily operations for the next twelve (12) months. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The ability of the Company to seek an acquisition target is dependent upon, among other things, obtaining additional financing to continue operations. In response to these concerns, management plans to fund operations through additional debt and equity financing. Debt instruments may be convertible or non-convertible and will vary based on the Company’s needs and financing options available at such times. There can be no assurance that management’s plan will be successful.

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Critical Accounting Policies

Please refer to Note 2 - Summary of Significant Accounting Policies in the accompanying Notes to the Consolidated Financial Statements.

Results of Operations

Overview. We had revenues of $0 and $0 for the years ended August 31, 2023, and 2022, respectively. We incurred a net (loss) of ($5,988,266) and ($40,877,813) for the years ended August 31, 2023, and 2022, respectively. The decrease in net income is attributable to the fators discussed below.

Revenues. We had revenues from operations of $0 and $0 for the years ended August 31, 2023, and 2022, respectively.

Gross Margin. Once cost of revenue and other expenses to generate revenue are considered, we had gross margins of $0 and $0 from our operations for the years ended August 31, 2023, and 2022, respectively.

Expenses. Our operating expenses were $1,367,386 and $5,249,745 for the years ended August 31, 2023, and 2022, respectively. The decrease was primarily attributable to decreases of $20,432 in general and administrative expenses, $169,369 in professional fees, $186,166 in research and development, $784,396 in salaries, and $2,545,839 in depreciation and amortization expenses, offset by an increase of $100,000 in lease termination claim.

Other (Income) Expense. Our total other (income) expense was $4,620,880 and $35,628,068 for the years ended August 31, 2023, and 2022, respectively. The decrease in other expenses was attributable to a decrease of $13,638 in interest income, a decrease in the impairment expense of $32,300,072, offset by an increase of $246,312 in interest expense, an increase of $26,901 in gain on extinguishment of debt and a in increase of $1,059,835 in other (income) expense.

Liquidity and Capital Resources

For the year ended August 31, 2023, we used net cash of $620,195 for operating activities, primarily attributable salaries, professional fees and general and administrative expense.

For the year ended August 31, 2023, we had no investing activities.

For the year ended August 31, 2023, cash of $513,558 was provided from financing activities received on our private placement financing.

Assets

We had total assets of $75,993 as of August 31, 2023, which consisted of $49,849 cash, other receivable of $7,895, prepaid expenses of $15,000, equipment of $1,569 (net of accumulated depreciation), and trademarks of $1,680.

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Liabilities

We had total liabilities of $3,505,956 as of August 31, 2023, consisting of accounts payable and accrued expenses of $1,528,332, note payable of $10,000, dividends payable of $1,748,625, and the convertible note payable, net of discount of $218,999.

Cash Requirements

At August 31, 2023, we had a cash balance of $49,849. Such cash amount of $49,849 is not sufficient to continue our 12-month plan of operation. We will need to raise capital to realize our 12-month plan of operation and fund our ongoing operational expenses. Additional funding will likely come from equity financing from the sale of our common stock or from entering into notes payable. If we are successful in completing equity financing, existing shareholders will experience dilution of their interest in our Company. In the absence of such financing, our business will likely fail. There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing.

Subsequent Events

Subsequent to the year ended August 31, 2023, the Company has entered into securities purchase agreements to receive net cash proceeds up to $150,000, after the original issue discount, from securities purchase agreements with attached $0.08 warrants to purchase up to 2,205,882 shares of common stock. Each note is discounted 18% with a maturity date of 13 months from original issuance. The notes bear interest of 8% per annum. Each note is convertible into common shares by dividing the outstanding principal on the note by the conversion price of $0.08. The warrants are exercisable for a period of seven years at an exercise price of $0.08 per share.

Subsequent to the year ended August 31, 3, the Company issued two demand promissory notes totaling $40,000 with 10% interest rate and 90-day maturity from the issuance date.

OFF-BALANCE SHEET ARRANGEMENTS

Not Applicable.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

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ITEM 8. FINANCIAL STATEMENTS

INNOVATION1 BIOTECH INC.

Financial Statements

August 31, 2023

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		Page

Report of Independent Registered Accounting Firm		20

Balance Sheets as of August 31, 2023 and 2022 (audited)		21

Statements of Operations for the Years Ended August 31, 2023 and 2022 (audited)		11

Statements of Stockholders’ Equity (Deficit) for the Years Ended August 31, 2023 and 2022 (audited)		23

Statements of Cash Flows for the Year Ended August 31, 2023 and 2022 (audited)		25

Notes to Financial Statements		26-37

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Innovation1 Biotech, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Innovation1 Biotech, Inc. (“the Company”) as of August 31, 2023 and 2022, and the related statements of operations, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended August 31, 2023, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of August 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended August 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has no revenue, net operating losses, and an accumulated deficit. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.

Fruci & Associates II, PLLC – PCAOB ID #05525

We have served as the Company’s auditor since 2017.

Spokane, Washington

January 16, 2024

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Innovation1 Biotech Inc.

Balance Sheets

	August 31, 2023			August 31, 2022

ASSETS
Current assets:
Cash	$	49,849		$	156,486
Accounts receivable		7,895			56,421
Prepaid expenses		15,000			74,049
Total current assets		72,744			286,956

Other assets
Equipment, net		1,569			2,615
Trademarks		1,680			1,680
Intangibles		-			42,980,076
ROU Asset		-			482,086
Security Deposit		-			210,000
Total other assets		3,248			43,676,457
Total Assets	$	75,993		$	43,963,413

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable	$	349,301		$	106,215
Accrued expenses		1,072,108			39,558
Accrued expenses – related parties		106,923			116,977
Mioxal liability, current portion		-			28,500,000
Related party payable		-			2,665
Lease Liability, current portion		-			199,203
Note payable, current portion		10,000			10,000
Dividends payable		1,748,625			837,798
Total current liabilities		3,286,957			29,812,416

Long term liabilities:
Lease liability		-			298,423
Mioxal liability		-			11,000,000
Convertible note payable, net of discount		218,999			-
Total long-term liabilities		218,999			11,298,423
Total liabilities		3,505,956			41,110,839

Commitments and contingencies (Note 8)		-			-

Stockholders' equity (deficiency):

Preferred stock Series A, $0.001 par value; 22,305,486 shares authorized; -0- issued and outstanding as of August 31, 2023, and August 31, 2022		-			-

Preferred stock Series B, $0.001 par value; 2,695,514 shares authorized; 2,694,514 and 2,694,514 issued and outstanding as of August 31, 2023 and August 31, 2022, respectively		2,695			2,695

Preferred stock Series B-1, $0.001 par value; 5,389,028 shares authorized; 5,389,028 and 5,389,028 issued and outstanding as of August 31, 2023 and August 31, 2022, respectively		5,389			5,389

Common stock, $0.001 par value; 200,000,000 shares authorized; 20,470,239 and 20,020,239 shares issued and outstanding as of August 31, 2023 and August 31, 2022, respectively		20,470			20,020
Additional paid in capital		55,171,921			47,375,513
Accumulated deficit		(58,630,438	)		(44,551,043	)
Total stockholders' equity (deficiency)		(3,429,963	)		2,852,574

Total Liabilities and Stockholders' equity	$	75,993		$	43,963,413

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

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Innovation1 Biotech Inc.

Statements of Operations

	August 31, 2023			August 31, 2022
Revenue	$	-		$	-
Cost of Revenue		-			-
Gross margin		-			-

Operating expenses:
Advertising		10,267			4,914
Consulting fees		35,500			398,033
General and administrative		341,927			362,359
Stock-based compensation		80,500			-
Lease termination claim		100,000			-
Professional fees		308,023			477,392
Research and development		15,000			201,166
Salaries		475,123			1,259,519
Depreciation		1,046			523
Amortization expense – intangible assets		-			2,545,839
Total operating expenses		1,367,386			5,249,745

Net operating income (loss)		(1,367,386	)		(5,249,745	)

Other (income) expense:
Interest expense		251,826			5,514
Interest income		-			(13,638	)
Impairment expense		3,480,076			35,780,148
Gain on extinguishment of debt		(170,857	)		(143,956	)
Other (income) expense		1,059,835			-
Total Other (income) expense		4,620,880			35,628,068

Net income (loss)		(5,988,266	)		(40,877,813	)

Deemed dividend related to Series B and B-1 convertible preferred stock down round provision		(7,180,301	)		-
Preferred Dividends		(910,829	)		(699,602	)
Net income (loss) available to common shareholders	$	(14,079,396	)	$	(41,577,415	)

Basic income (loss) per share	$	(0.70	)	$	(2.73	)

Weighted average number of common shares outstanding - basic		20,184,212			15,225,781

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

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Innovation1 Biotech Inc.

Statements of Stockholders' Equity (Deficit)

															Common						Total
	Preferred Stock - Series B				Preferred Stock - Series B1				Common Stock				Additional Paid-In		Stock to be			Accumulated			Stockholders Equity'
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Issued			Deficit			(Deficit)
Balance at August 31, 2022		2,694,514	$	2,695		5,389,028	$	5,389		20,020,239	$	20,020	$	47,375,513	$	-		$	(44,551,043	)	$	2,852,574
Convertible notes payable BCF and Warrant		-		-		-		-		-		-		50,000		-			-			50,000
Dividends on preferred stock accrued		-		-		-		-		-		-		-		-			(187,572	)		(187,572	)
Net loss, period ended November 30, 2022		-		-		-		-		-		-		-		-			(631,666	)		(631,666	)
Balance at November 30, 2022		2,694,514	$	2,695		5,389,028	$	5,389		20,020,239	$	20,020	$	47,425,513		-		$	(45,370,281	)	$	2,083,336
Dividends on preferred stock accrued		-		-		-		-		-		-		-		-			(273,939	)		(273,939	)
Convertible notes payable BCF and Warrant		-		-		-		-		-		-		250,000		-			-			250,000
Common shares to be issued at $0.225		-		-		-		-		-		-		-		22,500			-			22,500
Deemed Dividend		-		-		-		-		-		-		7,180,301		-			(7,180,301	)		-
Net loss, period ended February 28, 2023		-		-		-		-		-		-		-		-			(603,390	)		(603,390	)
Balance at February 28, 2023		2,694,514	$	2,695		5,389,028	$	5,389		20,020,239	$	20,020	$	54,855,814		22,500		$	(53,427,911	)	$	1,478,507
Dividends on preferred stock accrued		-		-		-		-		-		-		-		-			(221,863	)		(221,863	)
Stock based compensation		-		-		-		-		350,000		350		102,550		-			-			102,900
Common shares issued at $0.225		-		-		-		-		100,000		100		-		(22,500	)		-			(22,400	)
Convertible notes payable BCF and Warrant		-		-		-		-		-		-		213,557		-			-			213,557
Net loss, period ended May 31, 2023		-		-		-		-		-		-		-		-			(298,857	)		(298,857	)
Balance at May 31, 2023		2,694,514	$	2,695		5,389,028	$	5,389		20,470,239	$	20,470	$	55,171,921		-		$	(53,948,631	)	$	1,251,844
Dividends on preferred stock accrued		-		-		-		-		-		-		-		-			(227,455	)		(227,455	)
Stock based compensation		-		-		-		-		-		-		-		-			-			-
Common shares issued at $0.225		-		-		-		-		-		-		-		-			-			-
Deemed Dividend		-		-		-		-		-		-		-		-			-			-
Convertible notes payable BCF and Warrant		-		-		-		-		-		-		-		-			-			-
Net loss, period ended May 31, 2023		-		-		-		-		-		-		-		-			(4,454,352	)		(4,454,352	)
Balance at August 31, 2023		2,694,514	$	2,695		5,389,028	$	5,389		20,470,239	$	20,470	$	55,171,921		-		$	(58,630,438	)	$	(3,429,963	)

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	Preferred Stock - Series B				Preferred Stock - Series B1				Common Stock				Additional Paid-In		Common Stock to be		Accumulated			Total Stockholders Equity'
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Issued		Deficit			(Deficit)
Balance at August 31, 2021		2,694,514	$	2,695		-	$	-		188,616	$	188	$	2,745,906		-	$	(2,973,628	)	$	(224,839	)
Series B-1 preferred stock purchase agreements		-		-		5,389,028		5,389		-		-		3,994,611		-		-			4,000,000
Common stock issued for asset purchase		-		-		-		-		19,831,623		19,832		40,634,995		-		-			40,654,827
Dividends on preferred stock accrued		-		-		-		-		-		-		-		-		(136,887	)		(136,887	)
Net loss, period ended November 30, 2021		-		-		-		-		-		-		-		-		(239,853	)		(239,853	)
Balance at November 30, 2021		2,694,514	$	2,695		5,389,028	$	5,389		20,020,239	$	20,020	$	47,375,512		-	$	(3,350,368	)	$	44,053,248
Dividends on preferred stock accrued		-		-		-		-		-		-		-		-		(187,571	)		(187,571	)
Net loss, period ended February 28, 2022		-		-		-		-		-		-		-		-		(1,779,054	)		(1,779,054	)
Balance at February 28, 2022		2,694,514	$	2,695		5,389,028	$	5,389		20,020,239	$	20,020	$	47,375,512		-	$	(5,316,993	)	$	42,086,623
Dividends on preferred stock accrued		-		-		-		-		-		-		-		-		(187,571	)		(187,571	)
Net loss, period ended May 31, 2022		-		-		-		-		-		-		-		-		(1,609,876	)		(1,609,876	)
Balance at May 31, 2022		2,694,514		2,695		5,389,028		5,389		20,020,239		20,020		47,375,512		-		(7,114,440	)		40,289,176
Dividends on preferred stock accrued		-		-		-		-		-		-		-		-		(187,572	)		(187,572	)
Net loss, period ended August 31, 2022		-		-		-		-		-		-		-		-		(37,249,031	)		(37,249,031	)
Balance at August 31, 2022		2,694,514	$	2,695		5,389,028	$	5,389		20,020,239	$	20,020	$	47,375,512		-	$	(44,551,042	)	$	2,852,574

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

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Innovation1 Biotech Inc.

Statements of Cash Flows

	August 31, 2023			August 31, 2022

Cash flows from operating activities:
Net income (loss)	$	(5,988,266	)	$	(40,877,813	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		1,047			523
Amortization of ROU Asset		51,652			137,739
Amortization of Mioxal Asset		-			2,408,100
Amortization of discount, BCF, warrant on convertible notes		218,998			-
Termination of ROU asset lease		430,434			-
Stock based compensation		103,000			-
Impairment expense		3,480,076			35,780,148
Gain on extinguishment of debt		(170,857	)		(143,956	)
Gain on termination of lease		(19,236	)		-
Changes in operating assets and liabilities:
Accounts receivable		-			(56,421	)
Prepaid expenses		269,049			(270,049	)
Other receivable		48,526			-
Accounts payable		(248,569	)		(41,523	)
Related party payable		(2,665	)		(64,600	)
Accrued expenses		1,032,550			-
Accrued expenses - related parties		174,067			-
Net cash provided by (used in) operating activities		(620,195	)		(3,127,852	)

Cash flows from investing activities:
Purchase of equipment		-			(3,138	)
Cash paid for asset purchase		-			(850,000	)
Net cash used in investing activities		-			(853,138	)

Cash flows from financing activities
Proceeds form series B-1 preferred stock purchase agreements		-			4,000,000
Proceeds from notes payable		26,891			-
Proceeds from convertible notes payable - long term portion		486,667			-
Net cash provided by financing activities		513,558			4,000,000

Net increase (decrease) in cash		(106,637	)		19,010
Cash - beginning of the period		156,486			137,476
Cash - end of the period	$	49,849		$	156,486

Supplemental disclosures:
Interest paid	$	-		$	37,802
Income taxes	$	-		$	-
Non-cash investing and financing transactions:
Right of use asset and lease liability		-			619,825
Preferred stock dividends accrued		461,511			699,601
Payables settled with intangible assets		-			117,000
Deemed dividend		7,180,301			-
Transfer of Mioxal asset		39,600,000			-
Transfer of Mioxal liabilities		(39,500,000	)		-
Receivable created with Mioxal asset sale		(100,000	)		-
Common Stock issued for asset purchase	$	-		$	40,654,827

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

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Innovation1 Biotech, Inc.

Notes to the Financial Statements

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

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

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

Change in Control

On November 9, 2021, the Company completed the asset acquisition of ST Biosciences, Ltd., consisting substantially of intellectual property assets, relating to Mioxal® as discussed in Note 3 – Asset Acquisition. The closing of the acquisition resulted in a change of control of the Company. As part of the acquisition, Mr. Orr stepped down as the Company’s Chief Executive Officer and assumed the role of the Company’s Interim Chief Financial Officer. Mr. Orr has since resigned from his position and as a director. Pursuant to the terms of the Asset Purchase Agreement, Jeffrey J. Kraws was appointed as the Company’s Chief Executive Officer and a director of the Company. In addition, the Company agreed to appoint Jason Frankovich as a director of the Company subject to the Company’s compliance with Rule 14F-1 of the Exchange Act. During the Fiscal year ended August 31, 2023, both gentleman resigned from the Company.

Going Concern

The Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company had no revenue and a net operating loss of $5,988,266 for the fiscal year ended August 31, 2023. The Company has a working capital deficit of $3,214,213 and an accumulated deficit of $58,630,438 as of August 31, 2023. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for the twelve months after the issuance of this financial statement. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The ability of the Company to fully commence its operations is dependent upon, among other things, obtaining additional financing to continue operations and execution of its business plan. In response to these concerns, management plans to fund operations through additional debt and equity financing. Debt instruments may be convertible or non-convertible and will vary based on the Company’s needs and financing options available at such times. There can be no assurance that management’s plan will be successful.

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Innovation1 Biotech, Inc.

Notes to the Financial Statements

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

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

Reclassifications

Certain prior year amounts may have been reclassified for comparative purposes to conform to the current-year financial statement presentation. These reclassifications had no effect on previously reported results.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements. Actual results could differ from those estimates. Estimates are used when accounting for fair value calculations, including those related to embedded conversion features of outstanding convertible notes payable.

Cash and cash equivalents

The Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. The Company did not have any cash equivalents as of August 31, 2023, and August 31, 2022.

Revenue recognition

Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery.

Fair Value of Financial Instruments

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

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Innovation1 Biotech, Inc.

Notes to the Financial Statements

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

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

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

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

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

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

The Company did not have any Level 1, Level 2 or Level 3 assets and liabilities at August 31, 2023, and August 31, 2022.

Principals of Consolidation

The consolidated financial statements represent the results of Innovation1 Biotech Inc., its prior wholly owned subsidiary, Gridiron Ventures – dissolved in April 2022, and the assets, processes, and results therefrom. All intercompany transactions and balances have been eliminated. All financial information has been prepared in conformity with accounting principles generally accepted in the United States of America.

Inventories

Inventories consist of raw materials and T-free distillate and are stated at the lower of cost or net realizable value using the first‑in, first‑out method. The Company periodically assesses the recoverability of its inventory and reduces the carrying value of the inventory when items are determined to be obsolete, defective or in excess of forecasted sales requirements. Inventory write‑downs for excess, defective and obsolete inventory are recorded as impairment expense in the accompanying statement of operations. The Company wrote-off $0 and $17,000 of obsolete inventory or inventory below market value for the for the years ended August 31, 2023 and 2022, respectively.

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Innovation1 Biotech, Inc.

Notes to the Financial Statements

Property and Equipment

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

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

With the asset acquisition as discussed in Note 3 – Asset Acquisition the Company wrote off the remaining property and equipment as impaired in the accompanying statement of operations. Depreciation expense was $1,046 and $523 for the years ended August 31, 2023, and 2022, respectively.

Intangible Assets

The Company accounts for intangible assets as prescribed in ASC 350 Intangibles – Goodwill and Other, Including its evaluation for impairment on a periodic basis. The acquisition of the Mioxal intangible assets from ST Biosciences as described in Note 3 Acquisition were recorded at the acquisition cost, with the assumed debt recorded at its face value. The Company performed an evaluation of impairment at August 31, 2022, and recorded an impairment expense commensurate with the net present value of expected future cash flows, as informed by the sale of the Mioxal intangible assets and debt at November 7, 2022.

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.

The Series B and Series B1 Convertible Preferred shares would convert to 35,926,853 shares of the Company’s common stock in addition to the 20,470,239 outstanding shares at August 31, 2023. The Series B and Series B1 Convertible Preferred shares would convert to 8,083,542 shares of the Company’s common stock in addition to the 20,020,239 outstanding shares at August 31, 2022. The Company calculates diluted earnings per share by dividing the Company’s net income available to common shareholders less preferred dividends by the diluted weighted average number of shares outstanding during the period. The conversion of the Company’s Series B Convertible Preferred shares are excluded from the computation of diluted earnings per share as they are anti-dilutive due to the Company’s operating losses for the years ended August 31, 2023 and 2022.

Derivative Liabilities

The Company generally does not use derivative financial instruments to hedge exposures to cash flow or market risks. However, certain other financial instruments, such as warrants and embedded conversion features on convertible debt, are classified as derivative liabilities due to protection provisions within the agreements. Convertible notes payable are initially recorded at fair value using the Monte Carlo model and subsequently adjusted to fair value at the close of each reporting period. The preferred stock warrants are initially recorded at fair value using the Black Scholes model and subsequently adjusted to fair value at the close of each reporting period. The Company accounts for derivative instruments and debt instruments in accordance with the interpretive guidance of ASC 815, ASU 2017-11, and associated pronouncements related to the classification and measurement of warrants and instruments with conversion features.

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Innovation1 Biotech, Inc.

Notes to the Financial Statements

Income Taxes

Income taxes are accounted for under the assets and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Use of net operating loss carry forwards for income tax purposes may be limited by Internal Revenue Code section 382 if a change of ownership occurs.

Stock-Based Compensation

The Company accounts for share-based compensation in accordance with the fair value recognition provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 718. The Company issues restricted stock to employees and consultants for their services. Cost for these transactions is measured at the fair value of the equity instruments issued at the date of grant. These shares are considered fully vested and the fair market value is recognized as expense in the period granted. The Company recognized consulting expenses and a corresponding increase to additional paid-in-capital related to stock issued for services. For agreements requiring future services, the consulting expense is to be recognized ratably over the requisite service period.

There was stock-based compensation of $80,500 and $0 during years ended August 31, 2023, and 2022, respectively.

Related Parties

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

Pursuant to Section 850-10-20 the related parties include (a) affiliates of the Company; (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

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Innovation1 Biotech, Inc.

Notes to the Financial Statements

Recently Issued Accounting Standards

As of August 31, 2023, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.

Trademark

Trademark costs are capitalized as incurred to the extent the Company expects the costs incurred to result in a trademark being awarded. The trademarks are deemed to have an indefinite life and are reviewed for impairment loss considerations annually. As of August 31, 2023 and 2022, the Company had trademarks totaling $1,680.

Leases

Operating lease right of use (“ROU”) assets represent the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense for minimum lease payments is amortized on a straight-line basis over the lease term and is included in general and administrative expenses in the consolidated statements of operations.

NOTE 3 – ASSET ACQUISITION

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

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

Mioxal®	$	81,249,827
Other intangible assets		178,000
Less liabilities assumed:
Mioxal® liability assumed		(39,500,000	)
Other liabilities assumed		(423,000	)
Net value acquired in asset acquisition	$	41,504,827

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

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

	•	On September 10, 2022 - $4,000,000, not issued as of the date of this filing
	•	On September 10, 2023 - $5,000,000
	•	On September 10, 2024 - $6,000,000
	•	Total stock to be issued - $15,000,000

The remaining balance is to be paid on an earn-out basis whereunder Ingenius will earn an 8% royalty on all sales generated by Mioxal® until the balance is satisfied.

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

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

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Notes to the Financial Statements

Impairment of Intangible Assets

At August 31, 2022, an asset impairment evaluation resulted in the Company recording $35,762,550 in impairment expense in the fourth quarter ended August 31, 2022, and a carrying value of $42,980,076 for the intangible assets. The company had recorded impairment expenses of $17,598 in previous quarters, to total $35,780,148 for the fiscal year. The calculation of the carrying value of the Mioxal net assets was informed by the terms of the subsequent sale of those assets on November 7, 2022, as calculated below:

Valuation at the sale of Mioxal:
Cash to be received by the Company	$	100,000
FV of 350,000 shares transferred to Buyer ($0.13 per share)		(45,500	)
Debt assumed/forgiven by Buyer		39,500,000
Impairment expense		(39,554,500	)
NPV of estimated future royalty cash stream		-
Total estimated value of intangible assets at 8-31-2023		-
Carrying value of intangible assets at 8-31-2023	$	3,380,076
Impairment expense at 8-31-2023 on intangible assets	$	3,380,076

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

Sale of the Mioxal Intangible Assets:

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

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Innovation1 Biotech, Inc.

Notes to the Financial Statements

NOTE 4 – NOTES PAYABLE

Short-Term Notes Payable

On September 14, 2017, the Company issued a $10,000 promissory note to a limited liability company. The loan bears interest at 5% and has a maturity date of September 15, 2018. The unpaid balance including accrued interest was $12,982 and $12,482 at August 31, 2023, and 2022, respectively. The Company is in default with the repayment terms of the note. Interest of $2,982 and $2,482 was accrued for the years ended August 31, 2023 and 2022, respectively.

Convertible Notes Payable

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

During the twelve months ended August 31, 2023, the Company received convertible notes of $251,242 less a discount of $37,684, for cash proceeds of $213,558. The Company issued 3,140,556 warrants and recorded a fair value of $157,206 for the warrants. Each note is discounted 15% with a maturity date of 13 months from original issuance. The notes bear interest of 8% per annum to be paid monthly and a conversion price of $0.08 per share. The warrants are exercisable for a period of seven years at an exercise price of $0.08 per share.

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

	August 31, 2023			November 29, 2022
Market price of common stock on date of issuance	$	0.183 - 0.230		$	0.095
Risk-free interest rate	3.75-3.48		%		3.63	%
Expected dividend yield		0			0
Expected term (in years)		7			7
Expected volatility	219.7-240.9		%		202.5	%

Additionally, a beneficial conversion feature of $56,531 was determined to exist, which represented the lesser of the conversion price of the convertible instrument or the per share fair value of the underlying stock into which it is convertible. The fair value of the warrants and the beneficial conversion feature, which together consumed the value of the net proceeds, were charged to additional paid in capital at the date of issuance.

At August 31, 2023, the Company had outstanding convertible notes payable of $604,180, less remaining unamortized discounts of $508,661 for a net liability of $95,519. The Company recognized a total of $385,181 of discount amortization to interest expense during the twelve months ended August 31, 2023, respectively.

NOTE 5 – RELATED PARTY TRANSACTIONS

The Company had a contract with two consulting and pharmaceutical firms owned by the former Chief Science Officer, Salzman Group LLC and Herring Creek Pharmaceuticals, under which research and development activities are performed on behalf of the Company. During the fiscal year 2022, the Company paid $150,000 for a security deposit, that was impaired as of August 31, 2023, $131,500 for research and development fees and assumed $67,000 in a liability from ST Biosciences at the acquisition of the assets described in Note 3 Asset Acquisition. The $67,000 liability was released during the twelve months ended August 31, 2023, and was credited to the Mioxal intangible asset. As of August 31, 2023, and 2022, the Company owed $10,165 and $2,665 to these two firms and owed salary of $30,769 and $4,615 to Dr. Salzman. As of August 31, 2023, the Company wrote off the $10,165.

As of August 31, 2023 and 2022, the Company owed salary of $76,154 and $11,538, respectively, to Jason Frankovich, a former director.

During the twelve months ended August 31, 2023, the Company entered into an agreement with a former director for a payment of $80,000 and 100,000 common shares in exchange for a release of unpaid services. Resulting in a gain of $170,857 for the twelve months ended August 31, 2023.

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Notes to the Financial Statements

NOTE 6 – LEASE LIABILITY

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

Lessee accounting

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

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

Lease extensions

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

Operating leases

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

The following table summarizes balance sheet data related to leases at August 31, 2023 and August 31, 2022:

	August 31, 2023		August 31, 2022
Assets
Operating lease right of use assets	$	-	$	619,825
Less accumulated depreciation		-		(137,739	)
Total operating lease right of use assets	$	-	$	482,086

Liabilities		-
Operating lease liability, current	$	-	$	199,203
Operating lease liability, noncurrent		-		298,423
Total lease liabilities	$	-	$	497,626

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Innovation1 Biotech, Inc.

Notes to the Financial Statements

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

NOTE 7 – STOCKHOLDERS’ EQUITY

Dividends

During the year ended August 31, 2018, the Company issued Series A Convertible Preferred Stock, which accrues dividends at a rate of 5% annually. The Company exchanged the Series A Convertible Preferred for Series B Preferred Stock. As a result of the Exchange agreement, the dividends on the Series A Convertible Preferred Stock was reduced to $0 in the accompanying consolidated balance sheets. The Series B and Series B1 Convertible Preferred Stock accrues dividends at a rate of 10% annually. There was $1,748,625 and $837,798 of dividends payable at August 31, 2023 and August 31, 2022, respectively. The dividends have not been declared and are accrued in the accompanying condensed consolidated balance sheets as a result of a contractual obligation in the Company’s Series B and Series B1 Preferred Stock offering.

Preferred Stock

There were no shares of Series A Convertible Preferred Stock issued and outstanding as of August 31, 2023 and 2022, respectively.

There were 2,694,514 shares of Series B Convertible Preferred Stock issued and outstanding as of August 31, 2023, and August 31, 2022, respectively. There were 5,389,028 shares of Series B-1 Convertible Preferred Stock issued and outstanding as of August 31, 2023, and August 31, 2022, respectively.

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

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

Common Stock

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

As discussed in Note 3 – Asset Acquisition, on November 9, 2021, the Company completed the acquisition of all of the assets, including intellectual property assets, relating to Mioxal®, a nutraceutical complex composed of essential amino acids, natural coenzymes and minerals, and assumed certain liabilities held by ST Biosciences, Ltd., a company organized under the laws of England and Wales (“STB”). As part consideration for the acquisition, the Company issued 19,831,623 shares of Common Stock valued at $40,654,827 or $2.05 per share. With the disposition of the Mioxal® asset, certain shareholders of the Company transferred 350,000 common shares to Ingenius.

During the twelve months ended August 31, 2023, the Company issued 450,000 of common stock to employees and a former Director of the Company. Included in the issuance was 100,000 shares previously classified as to be issued shares with a value of $22,500. The expense associated with the issuance is included in general and administrative expense on the condensed consolidated statements of operations.

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Notes to the Financial Statements

There were 20,470,239 and 20,020,239 common shares issued and outstanding as of August 31, 2023 and 2022, respectively.

Warrants

During the twelve months ended August 31, 2023, the Company issued 7,552,320 warrants as part of the convertible notes financing, see Note 4 – Notes Payable. At August 31, 2023, the warrants had an intrinsic value of approximately $777,889.

At August 31, 2023, and 2022, the following warrants were outstanding:

	Number of warrants		Weighted average exercise price		Weighted average term remaining (years)
Balance, August 31, 2022		-	$	-		-
Issued		7,552,320		0.08		7
Balance, August 31, 2023		7,552,320	$	0.08		7

NOTE 8 – COMMITMENTS AND CONTINGENCIES

40 Wall Street Suites LLC.

Greenfingers LLC A/A/O Simon D. Roffe

NOTE 9 – INCOME TAXES

The Company’s policy is to provide for deferred income taxes based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates that will be in effect when the differences are expected to reverse. The U.S. federal corporate income tax rate was 21.0% for the years ended August 31, 2023 and 2022. We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented since we have experienced operating losses since inception. When it is more likely than not that a tax asset cannot be realized through future income, the Company must provide a valuation allowance for this future tax benefit.

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Innovation1 Biotech, Inc.

Notes to the Financial Statements

We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carryforwards (“NOL”), since management determined it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carryforward period.

The Company is not aware of any uncertain tax position that, if challenged, would have a material effect on the financial statements for the year ended August 31, 2023 or during the prior four fiscal years applicable under FASB ASC 740. We did not recognize any adjustment to the liability for uncertain tax position and therefore did not record any adjustment to the beginning balance of accumulated deficit on the consolidated balance sheet. All tax returns for the Company after its fiscal year ended August 31, 2019 remain open for examination.

The differences between the provision (benefit) for federal income taxes and federal income taxes computed using the U.S. statutory tax rate of 21% and state tax rate of 6.5% were as follows for the years ended August 31, 2023 and 2022:

	August 31, 2023						August 31, 2022
Federal income tax expense (benefit)	$	(1,793,000	)		21.0	%	$	(8,545,000	)		21.0	%
State income tax expense (benefit)		(555,000	)		6.5	%		(2,655,000	)		6.5	%
Revision of NOL estimates and state effective tax rates		-			-	%		(182,000	)		0.5	%
Increase in valuation allowance		2,348,000			(28.0	)%		11,392,000			(28.0	)%
Income tax expense (benefit)	$	-		-		%	$	-		-		%

The net deferred tax assets consist of the following as of August 31, 2023 and 2022:

	August 31, 2023			August 31, 2022
Deferred tax assets arising from:
Net operating loss carryforwards	$	3,582,000		$	2,163,000
Impairment expenses		10,774,000			9,845,000
Less: valuation allowance		(14,356,000	)		(12,008,000	)
Net deferred tax asset	$	-		$	-

The change in the valuation allowance was an increase of $2,348,000 for the year ended August 31, 2023.

NOTE 10 – SUBSEQUENT EVENTS

The Company evaluates events that have occurred after the balance sheet date of August 31, 2023, through the date which the financial statements were filed. Based upon the review, other than described below, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.

Subsequent to the year ended August 31, 2023, the Company issued two demand promissory notes totaling $40,000 with 10% interest rate and 90-day maturity from the issuance date.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, our principal executive officer who also serves as our principal financial officer is responsible for conducting an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the fiscal year covered by this report. Disclosure controls and procedures means that the material information required to be included in our Securities and Exchange Commission (“SEC”) reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, including any consolidating subsidiaries, and was made known to us by others within those entities, particularly during the period when this report was being prepared. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective as of August 31, 2023 as a result of material weaknesses in our internal control over financial reporting described below.

MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

As of August 31, 2023, management, consisting of our principal executive officer, assessed the effectiveness of our internal control over financial reporting. The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of, the Company’s President, who is our principal executive officer and principal financial officer, and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP in the United States of America and includes those policies and procedures that:

	·	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of our assets;

	·	Provide reasonable assurance our transactions are recorded as necessary to permit preparation of our financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

	·	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statement.

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In evaluating the effectiveness of our internal control over financial reporting, our management used the criteria set forth by the 2013 version of Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework. Based on that evaluation, completed only by our Chief Executive Officer, and a director, who also serves as our principal financial officer, concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below.

This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses. The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (i) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures, and (ii) inadequate segregation of duties consistent with control objectives, The aforementioned material weaknesses were identified by our Chief Executive Officer, who also serves as our principal financial officer, in connection with the review of our financial statements as of August 31, 2023.

Management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors’ results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods. If we have sufficient funds and are able to hire additional personnel, we plan to implement additional oversight and monitoring procedures to our internal controls next year.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING.

There were no changes in the Company’s internal control over financial reporting that occurred during the year ended August 31, 2023 that have materially affected, or that are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION.

None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Our executive officers and directors and their respective ages as of the date of filing of this Annual Report on Form 10-K are as follows:

Name	Age	Positions

Frederick E. Pierce, II	62	Interim Acting Chief Executive Officer, President and Chairman
Charles W. Allen	48	Director, Treasurer and Secretary
Dr. Shahin Gharakhanian	69	Director

Frederick E. Pierce, II, Interim Acting Chief Executive Officer, President and Chairman

Frederick E. Pierce was appointed Director on September 9, 2022 and Chairman of the Board, President and Interim Acting Chief Executive Officer on December 6, 2022. Mr. Pierce is the Chief Executive Officer and Co-founder of Decoy Therapeutics, Inc. founded in 2020. Decoy has corporate offices in Cambridge, MA and a lab at JLABs New York City. Mr. Pierce is also an Advisor to the Canadian Consulate of Boston/Cambridge’s Healthcare and Technology Accelerator and a Board member of the Canadian Entrepreneurs of New England, where he is Chairman of the Life Sciences Leadership Council. From 2017 through 2020, Mr. Pierce served as a Senior Advisor for Bionest Partners, a life sciences consulting company, based in Paris and New York. From 2018 to 2021 Mr. Pierce served as Chief Executive Office and on the Board of Directors of Microbial Machines, Inc., a biotechnology research company based in Woburn, Massachusetts. From 2017 through 2020.

Mr. Pierce is a serial biotech entrepreneur with over 20 years of increasing senior leadership and operating experience building successful biotech companies.

Charles W. Allen, Director, Treasurer and Secretary

Charles W. Allen was appointed Director on December 5, 2022. Since February 5, 2014, Mr. Allen has served as the CEO of BTCS Inc. (“BTCS”) and the Chairman of the Board of BTCS since September 11, 2014. Mr. Allen is responsible for the overall corporate strategy and direction of BTCS. From January 12, 2018 until 2019 Mr. Allen has been the CEO of Global Bit Ventures Inc. (“GBV”), which discontinued its operations in 2019. From October 10, 2017, Mr. Allen was a director of GBV. Mr. Allen has extensive experience in business strategy and structuring and executing a variety of investment banking and capital markets transactions, including financings, IPO’s and mergers and acquisitions. Prior to his work in the blockchain industry at BTCS, he worked domestically and internationally on projects in technology, media, natural resources, logistics, medical services and financial services. He has served as a Managing Director at numerous boutique investment banks focused on advising and raising capital for small and mid-size companies. Mr. Allen received a B.S. in Mechanical Engineering from Lehigh University and a M.B.A. from the Mason School of Business at the College of William & Mary.

Shahin Gharakhanian, Director

Dr. Shahin Gharakhanian was appointed Director on December 5, 2022. Dr. Gharakhanian is Chair, Scientific Advisory Board of Decoy Therapeutics. He is a Physician-Executive with expertise in Pharmaceutical Medicine, Leadership/Management, and an international track record: Clinical Medicine, Attending Physician, Infectious Diseases & Tropical Medicine at AP-HP Assistance Publique–Hopitux de Paris, the largest hospital system in Europe. He has worked closely with HIV discoverers 2008 Nobel Laureate, Françoise Barré-Sinoussi and HIV co-discoverer Willy Rozenbaum (Science, 1981). Dr. Gharakhanian has held industry positions, including Vice-President of Vertex Pharmaceuticals Inc., Global R&D group in Cambridge MA, Corporate Operating Council Member. He oversaw clinical and launch of four novel treatments including a “blockbuster” in chronic HCV. In 2011, Dr. Gharakhanian founded Shahin Gharakhanian MD Consulting LLC at the CIC: Cambridge Innovation Center, an elite consulting network providing strategic/operational expertise in drug development. Collaborations globally include more than 20 companies, including Genzyme Corp. (USA), GSK/ViiV Healthcare (USA), Novartis (Switzerland/USA), and Stallergenes Greer (France/USA). Dr. Gharakhanian’s medical education has been at Paris-Sorbonne University with two decades at Harvard Medical School Programs. His academic or industry work has been comprised of Bacterial disease (ds), Clostridium Difficile, Microbiomes, Tuberculosis, Viral ds: HIV, HBV, HCV, RSV, and Parasitic ds: Malaria.

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TERM OF OFFICE

As defined in the amendment to the Company’s Bylaws on November 18, 2022, all directors hold office for a period of 2 years or until their successors are duly elected and qualified or until their removal or resignation.

DIRECTOR INDEPENDENCE

Our common stock is quoted on the OTCQB, which does not have director independence requirements. Our Board is composed of three members, of which two members qualify as independent directors in accordance with the published listing requirements of the NASDAQ Stock Market. Mr. Pierce is not independent as a result of serving as the interim acting Chief Executive officer.

COMMITTEES

Due to our size, we have not formally designated a nominating committee, an audit committee, a compensation committee, or committees performing similar functions. The Board currently acts as our audit committee. Since we are still a developing company, the Board is still in the process of finding an “audit committee financial expert” as defined in Regulation S-K.

BOARD DIVERSITY

While we do not have a formal policy on diversity, our Board considers diversity to include the skill set, background, reputation, type and length of business experience of our Board members, as well as a particular nominee’s contribution to that mix. Although there are many other factors, the Board seeks individuals with experience in the life sciences industry, accounting and public company experience, and legal experience.

STOCKHOLDER NOMINATIONS

We do not have a policy regarding the consideration of any director candidates which may be recommended by our stockholders, including the minimum qualifications for director candidates, nor has our Board established a process for identifying and evaluating director nominees, nor do we have a policy regarding director diversity. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our stockholders, including the procedures to be followed. Given the early stage of our business, we do not anticipate that any of our stockholders will make such a recommendation in the near future. While there have been no nominations of additional directors proposed, in the event such a proposal is made, all members of our Board will participate in the consideration of director nominees. In considering a director nominee, it is likely that our Board will consider the professional and/or educational background of any nominee with a view towards how this person might bring a different viewpoint or experience to our Board.

STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS

We have not implemented a formal policy or procedure by which our stockholders can communicate directly with our Board of Directors. Nevertheless, every effort has been made to ensure that the views of stockholders are heard by the Board of Directors or individual directors, as applicable, and that appropriate responses are provided to stockholders in a timely manner. We believe that we are responsive to stockholder communications, and therefore have not considered it necessary to adopt a formal process for stockholder communications with our Board. During the upcoming year, our Board will continue to monitor whether it would be appropriate to adopt such a process.

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CODE OF ETHICS

The Company has not adopted a code of ethics that applies to its principal executive officers, principal financial officer, principal accounting officer or controller, or persons performing similar functions.

ITEM 11. EXECUTIVE COMPENSATION

The following information is related to the compensation paid, distributed or accrued by us for fiscal 2023 and 2022 to all Chief Executive Officers (principal executive officers) serving during the last fiscal year and the two other most highly compensated executive officers serving at the end of the last fiscal year whose compensation exceeded $100,000. We refer to these individuals as our “Named Executive Officers.”

SUMMARY COMPENSATION TABLE

Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)*		Option Awards ($)*		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation ($)		All Other Compensation($)		Total ($)

Timothy Orr Former Chief Executive Officer and Former Interim	2023		-		-		-		-		-		-		-		-
Chief Financial Officer	2022		-		-		-		-		-		-		108,000		108,000

Jeffery Kraws Former Chief	2023		-		-		-		-		-		-		-		-
Executive Officer	2022		312,981		194,250		-		-		-		-		-		507,231

Andrew Salzman Former Chief	2023		-		-		-		-		-		-		-		-
Science Officer	2022		91,538		-		-				-		-		131,500		223,038

Director Compensation

Our directors were not compensated in fiscal 2023.

Option Grants

There are no unexercised stock options, stock that has not vested and incentive plan awards for our named executive officers outstanding as of August 31, 2023 and 2022, respectively.

Option Exercises and Fiscal Year-End Option Value Table.

There were no stock options exercised by the named executive officers as of the end of the fiscal period ended August 31, 2023.

Long-Term Incentive Plans and Awards

There were no awards made to a named executive officer, under any long-term incentive plan, as of the end of the fiscal period ended August 31, 2023.

Other Compensation

There are no annuity, pension or retirement benefits proposed to be paid to officers, directors, or employees of our company in the event of retirement at normal retirement date as there was no existing plan as of the end of the fiscal year ended August 31, 2023, and through the date of filing of this Annual Report on Form 10-K, provided for or contributed to by our company.

DIRECTOR COMPENSATION

As of August 31, 2023, our director(s) have not received compensation for serving on the board. We plan to provide an industry standard renumeration package for our board members.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth the number of shares of our common stock beneficially owned as of January 12, 2024 by (i) those persons known by us to be owners of more than 5% of our common stock, (ii) each director, (iii) our Named Executive Officers, and (iv) all of our executive officers and directors as a group. Unless otherwise specified in the notes to this table, the address for each person is: c/o Innvation1 Biotech Inc., Inc., 7 Grand View Avenue, Somerville, MA 02143

Title of Class	Beneficial Owner	Amount of Beneficial Ownership (1)		Percent Beneficially Owned (1)

Directors and Named Executive Officers:
Common Stock	Frederick E. Pierce, II (2)		0		0	%
Common Stock	Jeffrey J. Kraws (3)		1,389,055		6.8	%
Common Stock	Charles Allen (4)		0		0
Common Stock	Shahin Gharakhanian (5)		0		0
Common Stock	All directors, and executive officers as a group (4 persons)		1,389,055		6.8	%

5% Shareholders:
Common Stock	Jason Frankovich		13,452,785		65.72	%

———————

* Less than one percent.

(1)

Applicable percentages are based on 20,470,239 shares outstanding. Beneficial ownership is determined under the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock, underlying options and warrants, and convertible notes currently exercisable or convertible, or exercisable or convertible within 60 days of January 12, 2024 are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person. Unless otherwise indicated in the footnotes to this table, the Company believes that each of the shareholders named in the table has sole voting and investment power with respect to the shares of common stock indicated as beneficially owned by them. The table includes only vested options and warrants or options and warrants that have or will vest and become exercisable within 60 days of January 12, 2024.

(2)	Pierce. Mr. Pierce is a director and executive officer.

(3)	Kraws. Ms. Kraws is a former executive officer (chief executive officer) and director. Because Mr. Kraws served as Chief Executive Officer in fiscal 2023, he is a named executive officer under the SEC’s disclosure rules.

(4)	Allen. Mr. Allen is a director.

(5)	Gharakhanian. Dr. Gharakhanian is a director.

(6)	Frankovich. Mr. Frankovich is the former Chairman of STB, formerly a related party, and directly or indirectly owns 65.72% of the issued and outstanding ordinary shares of the Company. Mr. Frankovich is a former Director and employee of the Company. This number includes 942,002 in affiliated holdings.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the years ended August 31, 2023 and 2022, we paid Timothy Orr, our former interim CFO and director, $0 and $108,000, respectively. The monies owed represented unpaid compensation and reimbursements for business expenses.

The Company had a contract with two consulting and pharmaceutical firms owned by Dr. Andrew Salzman, the former Chief Science Officer and director during fiscal year 2022 and early fiscal year 2023, Salzman Group LLC and Herring Creek Pharmaceuticals, under which research and development activities are performed on behalf of the Company. During the fiscal year 2022, the Company paid $150,000 for a security deposit, $131,500 for research and development fees and assumed $67,000 in a liability from ST Biosciences at the acquisition of the assets described in Note 3 Asset Acquisition. The $67,000 liability was released during the twelve months ended August 31, 2022, and was credited to the Mioxal intangible asset. As of August 31, 2023 and 2022, the Company owed $0 and $2,665 to these two firms and owed salary of $30,769 and $4,615 to Dr. Salzman.

Mr. Kraws, a former officer of the Company, owns approximately 6.8% of the issued and outstanding ordinary shares of STB, and Mr. Frankovich, a former director, owns approximately 66% of the issued and outstanding ordinary shares of STB. As a result of the acquisition, STB was issued 19,831,623 shares of the Company’s common stock, which represented approximately 70% of the Company’s outstanding shares of common stock on a fully diluted basis as of the closing of the transaction.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The Board of Directors selected Fruci & Associates II, PLLC, 802 N. Washington St., Spokane, WA 99201 as the independent registered public accounting firm to examine the consolidated financial statements of the Company and its subsidiary for the fiscal year ending August 31, 2023. Fruci & Associates II, PLLC have audited the financial statements of the Company since the fiscal year ended August 31, 2017.

The following table summarizes the fees charged the Company for the listed services during fiscal years 2023 and 2022:

Type of fee:	August 31, 2023		August 31, 2022		Description

Audit fees:	$	54,751	$	119,280	Services in connection with the audit of the annual financial statements and the review of the financial statements included in our reports on Forms 10-Q and 10-K.
Audit related fees:		-		-	For assurance and related services that were reasonably related to the performance of the audit or review of financial statements and not reported under “Audit Fees”.
Tax fees:		500		4,000
All other fees		-		-
Total	$	55,251	$	123,280

All of the services described above were approved by the Board of Directors.

The Board of Directors is responsible for appointing, setting compensation for and overseeing the work of the independent registered public accounting firm. The Board requires its pre-approval of all audit and permissible non-audit services provided by the independent registered public accounting firm. The Board considers whether such services are consistent with the rules of the SEC on auditor independence.

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following Exhibits, as required by Item 601 of Regulation SK, are attached or incorporated by reference, as stated below.

		Incorporated by Reference			Filed or Furnished
No.	Exhibit Description	Form	Date Filed	Number	Herewith
3.1.1	Articles of Incorporation	S-1	4/13/2015	3.1
3.1.2	Certificate of Amendment	10-K	12/15/2017	3.1.2
3.1.3	Certificate of Amendment	8-K	2/21/2018	3.1.1
3.1.4	Certificate of Amendment	8-K	8/16/2018	3.1.1
3.1.5	Certificate of Amendment	8-K	8/16/2018	3.1.2
3.1.6	Certificate of Designation	8-K	8/16/2018	3.1.3
3.1.7	Certificate of Correction	8-K	8/16/2018	3.1.4
3.1.8	Amendment to Amended and Restated Certificate of Designations, Preferences and Rights of the Series B Convertible Preferred Stock	8-K	11/24/2021	3.1
3.2	Bylaws	S-1	4/13/2015	3.2
3.2.1	Amendment to Certificate of Designations, Preferences and Rights of the Series B-1 Convertible Preferred Stock	8-K	11/24/2021	3.2
3.2.2	Amended and Restated Bylaws	8-K	11/30/2022	3.2
4.1	Securities Purchase Agreement & Warrants Dated July 30, 2018	10-K	12/14/2020	4.1
10.1	Supply Agreement, Notis Global, Inc. November 27, 2019	10-K	12/14/2020	10.1
10.2	Toll Processing Agreement, Syndicate Oil, November 26, 2019	10-K	12/14/2020	10.2
10.3	Collaboration Agreement, Notis Global, Inc. January 24, 2020	10-K	12/14/2020	10.3
10.4	Calvary Convertible Note Dated August 27, 2019	10-K	12/14/2020	10.4
10.5	Calvary Convertible Note Dated November 25, 2019	10-K	12/14/2020	10.5
10.6	Calvary Convertible Note Dated January 27, 2020	10-K	12/14/2020	10.6
10.7	Calvary Convertible Note Dated April 27, 2020	10-K	12/14/2020	10.7
10.8	Exchange Agreement dated April 9, 2021 by and between Gridiron BioNutrients, Inc. and Cavalry Fund Management, LLP	8-K	4/12/2021	10.1
10.9	Series B1 Preferred Stock FinancingAgreement dated September 7, 2021 by and between Gridiron BioNutrients, Inc. and Lincoln Park Capital Fund, LLP	8-K	9/7/2021	10.1
10.10	Definitive Asset Purchase Agreement with ST Biosciences, Ltd Dated November 5, 2021	8-K	10/28/2021	10.1
10.11	Agreements Relating to the Transfer of the Mioxal Product, dated as of November 7, 2022, by and between Innovation1 Biotech Inc. and Ingenius Biotech S.L	8-K	11/14/2022	10.1
10.12	Series B-1 Purchase Agreement, dated November 24, 2021, by and between Gridiron BioNutrients, Inc. and L1 Capital Opportunities Master Fund Ltd.	8-K	11/24/2021	10.1
10.13	Securities Purchase Agreement by and between Innovation1 Biotech Inc. Cavalry Fund I, LP, Lincoln Park Capital Fund, LLC and L1 Capital Global Opportunities Master Fund Ltd (including the Form of Note and Warrant).	8-K	12/12/2022	10.1
10.14	Security Agreement by and between by and between Innovation1 Biotech Inc. Cavalry Fund I, LP, Lincoln Park Capital Fund, LLC and L1 Capital Global Opportunities Master Fund Ltd.	8-K	12/12/2022	10.2
31.1	Certification of Principal Executive Officer and Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				Filed
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				Furnished*
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)				Filed
101.SCH	Inline XBRL Taxonomy Extension Schema Document				Filed
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document				Filed
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document				Filed
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document				Filed
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document				Filed
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)				Filed

*This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.

Copies of this report (including the financial statements) and any of the exhibits referred to above will be furnished at no cost to our stockholders who make a written request to Innovation1 Biotech Inc., at the address on the cover page of this report, Attention: Corporate

ITEM 16. FORM 10-K SUMMARY

Not applicable.

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, we caused this report to be signed on our behalf by the undersigned thereunto duly authorized.

	INNOVATION1 BIOTECH INC.

Date: January 16, 2024	By:	/s/ Frederick E. Pierce
		Frederick E. Pierce
		Interim Acting Chief Executive Officer,
		Principal Financial Officer, President and Chairman of the Board

In accordance with the Exchange Act, this report has been signed below by the following persons on our behalf and in the capacities and on the dates indicated.

Date: January 16, 2024		/s/ Frederick E. Pierce
		Frederick E. Pierce
		Interim Acting Chief Executive Officer,
		Principal Executive Officer, Principal Accounting Officer Chairman of the Board of Directors

Date: January 16, 2024		/s/ Charles W. Allen
		Charles W. Allen
		Treasurer and Secretary and Director

Date: January 16, 2024		/s/ Dr. Shahin Gharakhanian
		Dr. Shahin Gharakhanian
		Director

Innovation1 Biotech Inc. 10-K