The following discussion of our financial condition and results of operations for the three and nine months ended May 31, 2022 and 2021 should be read in conjunction with the consolidated financial statements and the notes to those statements that are included elsewhere in this report. 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 our Annual Report on Form 10-K for the fiscal year ended August 31, 2021, as filed with the SEC on December 10, 2021 and our other filings with the SEC. 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 report.





Overview

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).

Innovation1 Biotech Inc. ("IVBT") believes it will be among the first companies to harness the raw power of botanical therapeutics by transforming them into fully synthetic drugs that are safely, reliably and consistently delivered. There are two fundamental limitations in exploiting botanical Schedule 1 molecules:





    1.  Large and unpredictable pharmacokinetic excursions, both high and low,
        that make the drug potentially dangerous or ineffective

    2.  Insolubility in water that curtails bioavailability across mucosal
        membranes

To overcome these limitations, IVBT has engaged with a US-Israeli pharmaceutical firm that has pioneered the design and development of novel small molecules in the fields of cancer, heart disease, lung injury, intermediary metabolism and ophthalmology, with 3 exits totaling $1.4 billion, federal R&D grants and contracts totaling $160M and capital raises of $152M. The firm is currently regarded as a world leader in the design and optimization of rare cannabinoids.

The pharmaceutical firm has invented novel, proprietary, water-soluble prodrugs of the most promising botanical molecules existing today. Its prodrugs overcome the above fundamental limitations intrinsic to botanical molecules and enable for the first time the exploitation of the vast intrinsic therapeutic power of botanical Schedule 1 molecules.

IVBT has acquired five proprietary preclinical prodrugs, all fully synthetic without connection to botanical sourcing: a mushroom-derived psychedelic molecule for treatment post-traumatic stress disorder and depression, a novel cannabinoid and tree bark derived psychedelic for treatment of addiction and three additional novel cannabinoid prodrugs addressing clinical indications of refractory epilepsy, burn wounds and uveitis.

IVBT also owns a patented nutraceutical complex specially designed and formulated to contribute and help maintain normal energy metabolism, improve mood and reduce fatigue for those suffering from fibromyalgia and/or chronic fatigue syndrome. We look to initiate sales of this product in the marketplace in 2022.

IVBT's drug portfolio uniquely positions IVBT to capitalize on the growing global demand for pharmaceutical Schedule 1 drugs.





Cash Flows & Going Concern

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. To date the Company only generated nominal revenues and consequently has incurred recurring losses from operations. 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 Company is attempting to commence operations and generate sufficient revenue; however, the Company's cash position may not be sufficient to support its daily operations. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business model and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering.






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We have only realized nominal revenues from our business in a prior year. In the next 12 months, we plan to identify business to whom we can license and/or distribute our product, Mioxal®, as well as seek additional opportunities to continue as a going concern.





COVID-19

In December 2019, a novel strain of COVID-19 was reported in China. Since then, the COVID-19 has spread globally including across North America and the United States. The spread of COVID-19 from China to other countries has resulted in the World Health Organization (WHO) declaring the outbreak of COVID-19 as a "pandemic," or a worldwide spread of a new disease, on March 11, 2020. Specifically, we caution that our business could be materially and adversely affected by the risks, or the public perception of the risks, related to the outbreak of COVID-19.

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 for the Three Months Ended May 31, 2022 and 2021

Overview. We had revenues of $0 for the three months ended May 31, 2022 and 2021, respectively. We incurred a net income (loss) of ($1,609,876) and $796,156 for the three months ended May 31, 2022 and 2021, respectively. The increase in net loss is attributable to the factors discussed below.

Revenues. We had $0 revenues from operations for the three months ended May 31, 2022 and 2021. The extent to which, and the amount of revenues which may be generated from our future business operations and activities is unknown.

Gross Margin. We had $0 gross margin for the three months ended May 31, 2022 and 2021.

Expenses. Our operating expenses were $1,595,378 and $47,097 for the three months ended May 31, 2022 and 2021, respectively. The increase was primarily attributable to our November 5, 2021 asset acquisition from ST BioSciences, Ltd., ("STB"). Four former STB employees or contractors were hired which increased salaries approximately $357,212, consulting fees increased approximately $68,000 for compensation for our former CFO, professional fees increased approximately $214,343 from the legal cost associated with our November 5, 2021 asset acquisition, amortization expense related to the asset acquisition and the right-of-use asset increased $900,526, and an approximate $8,200 increase in other general and administrative and advertising expenses.

Other (Income) Expense. Our total other (income) expense was $14,498 and ($843,253) for the three months ended May 31, 2022 and 2021, respectively. The $857,751 decrease in other income was attributable to a gain on derivative liability during the prior year, a decrease in interest expense and a decrease in interest income.

Results of Operations for the Nine Months Ended May 31, 2022 and 2021

Overview. We had revenues of $0 and $3,080 for the nine months ended May 31, 2022 and 2021, respectively. We incurred a net income (loss) of ($3,628,782) and $1,116,837 for the nine months ended May 31, 2022 and 2021, respectively. The increase in net loss is attributable to the factors discussed below.

Revenues. We had $0 and $3,080 revenues from operations for the nine months ended May 31, 2022 and 2021, respectively. The extent to which, and the amount of revenues which may be generated from our future business operations and activities is unknown.

Gross Margin. We had $0 and $1,659 gross margin for the nine months ended May 31, 2022 and 2021, respectively.

Expenses. Our operating expenses were $3,738,811 and $162,208 for the nine months ended May 31, 2022 and 2021, respectively. The increase of $3,576,604 was primarily attributable to our November 5, 2021 asset acquisition from ST BioSciences, Ltd., ("STB"). Consulting fees increased by $279,805, professional fees increased by $559,877, salaries increased by $937,324, amortization expense increased $1,783,574 and general and administrative and advertising expenses increased by $16,024.

Other (Income) Expense. Our total other (income) expense was ($110,029) and ($1,277,386) for the nine months ended May 31, 2022 and 2021, respectively. The $1,167,357 decrease in other (income) was attributable to a gain on derivative liability and interest accretion during the nine months ended May 31, 2021. Interest expense decreased by $75,257, interest income decreased by $41,929,






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Liquidity and Capital Resources

For the nine months ended May 31, 2022, we used net cash of $2,648,179 from operating activities, primarily attributable to our November 5, 2021 asset acquisition from ST BioSciences, Ltd.

For the nine months ended May 31, 2022, we used net cash of $853,138 from investing activities, for our November 5, 2021 asset acquisition from ST BioSciences, Ltd.

For the nine months ended May 31, 2022, cash of $4,000,000 was provided from financing activities with $4,000,000 received for our Series B-1 Convertible Stock financing.





Assets

We had total assets of $81,162,939 as of May 31, 2022, which consisted of $636,159 cash, other receivable of $56,421, prepaid expenses of $127,826, equipment of $2,876, security deposit of $60,000, $533,738 right-of-use asset, trademarks of $1,680, and intangibles asset of $79,744,239 from our November 5, 2021 asset acquisition from ST BioSciences, Ltd.

The cash of $636,159 is attributable to our Series B-1 Convertible Stock financing for $4,000,000. For a further discussion, see Note 9 - Stockholders' Equity in the accompanying notes to the financial statements.





Liabilities

We had total liabilities of $40,873,763 as of May 31, 2022 consisting of accounts payable of $133,578, accrued expenses of $35,555, current acquisition payments due to Ingenius of $28,500,000, note payable - current portion of $10,000, lease payable - current portion of $194,305, lease payable $350,099, dividends payable of $650,226 for our Series B and Series B-1 Convertible Preferred stock and long-term acquisition payments due to Ingenius of $11,000,000. With the November 5, 2021 asset acquisition from ST BioSciences, Ltd., the Company assumed current and long-term liabilities of $39,923,000 for Mioxal and accounts payable.

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