Quarterly report pursuant to Section 13 or 15(d)


3 Months Ended
Mar. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]  



Intangible asset represents $12,936,264 (December 31, 2022 - $13,089,377) for intellectual property (“Manna IP”) acquired under an asset purchase agreement with Manna Nutritional Group, LLC (“Manna”) dated September 10, 2021. The Manna IP encompasses patented technologies to naturally process and convert grain, pulses, and root vegetables, resulting in low-starch, low-sugar, high-protein, fiber-rich baking flour products, as well as a wide range of breakfast cereals, juices, natural sweeteners, and baking enhancers. The Company paid $1,475,000 in cash and issued 7,379,969 prefunded warrants valued at $12,106,677 (the “Purchase Price”) adjusted for foreign exchange differences of $481,663 (December 31, 2022 - $492,300). Subject to a 9.99% stopper and SEC Rule 144 restrictions, the prefunded warrants will vest in tranches up until March 10, 2024. When vested the tranches of prefunded warrants are convertible into an equal number of common shares.


On January 3, 2023, Manna satisfied all of its contractual obligations when the patent was approved by the US Patents Office and the title was transferred to the Company. The Company issued 1,637,049 shares in relation to this transaction on January 3, 2023. As at March 31, 2023, there were 5,742,920 unconverted prefunded warrants outstanding.


Based on the terms above and in conformity with US GAAP, the Company accounted for purchase as an asset acquisition and has deemed the asset purchased as an in-process research and development. The asset was completed and will be amortized over its useful life of 20 years. The Company recorded $163,750 in amortization expense related to the Manna IP for the three months ended March 31, 2023.


The estimated annual amortization expense for the next five years are as follows:


Year ending December 31:   Amount
Remaining 2023   $ 491,251
2024     655,001
2025     655,001
2026     655,001
2027     655,001
Subsequent years     9,825,009
Total   $ 12,936,264