Quarterly report pursuant to Section 13 or 15(d)

DERIVATIVE LIABILITY AND FAIR VALUE MEASUREMENTS

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DERIVATIVE LIABILITY AND FAIR VALUE MEASUREMENTS
6 Months Ended
Feb. 29, 2020
Derivative Liability And Fair Value Measurements [Abstract]  
DERIVATIVE LIABILITY AND FAIR VALUE MEASUREMENTS

NOTE 8 – DERIVATIVE LIABILITY AND FAIR VALUE MEASUREMENTS

 

The Company recognized a derivative liability related to the purchase price protection clause associated with a previous a private placement offering. Additional units would be issued to the unit holder if the Company should issue common stock or the equivalent at a share price less than $7.60. In accordance with ASC 815-10- Derivatives and Hedging we measured the derivative liability using a Monte Carlo pricing model. Accordingly, at the end of each quarterly reporting date, the derivative fair market value is re-measured and adjusted to current market value.

 

Changes in the fair value of the warrant liability were as follows:

 

Fair value – August 31, 2019

 

$ 29,501

 

 

 

 

 

 

Reclass of warrant derivative liability from equity

 

 

 

Change in fair value for the period of warrant derivative liability

 

 

(29,501

)

Fair value –February 29, 2020

 

 

 

 

As of February 29, 2020, there is no derivative liability associated with shares of common stock issued pursuant to the Series E private offering as they no longer meet the criteria for price protection.