NOTE 6 - EQUITY

Preferred shares

The Company has authorized 6,250,000 shares of preferred stock with a par value of $0.001 per share.

During the six months ended February 29, 2020, there were no issuances of preferred stock. 

Common Shares

The Company has authorized 18,750,000 shares of common stock with a par value of $0.001 per share. Each share of common stock entitles the holder to one vote, in person or proxy, on any matter on which an action of the stockholders of the Company is sought.

During the six months ended February 29, 2020, the Company issued 80,033 shares of common stock as follows:

On December 2, 2019, 6,250 shares of common stock previously issued to a director of the Company were cancelled upon the resignation of the director from the Company. As a result, the Company reversed an expense of $2,500 which was recorded in prior quarter.

During the six months ended February 29, 2020, the Company recorded $21,000 of stock compensation expense for four members of the Company’s Board of Directors. The unamortized value of the stock-based compensation as of February 29, 2020 is $54,833.

Warrants

A summary of activity during the six months ended February 29, 2020 follows:

The intrinsic value of the warrants as of February 29, 2020 is $0. All of the outstanding warrants are exercisable as of February 29, 2020.

Stock Options

2018 Equity Incentive Plan

On December 2, 2019, 22,250 shares of common stock previously granted to a director of the Company in the form of a stock option were cancelled upon resignation of the director from the company.

On December 6, 2019, the Company granted 10,000 shares of common stock to a director of the Company in the form of a stock option valued at $24,401. The exercise price per share is $2.65 and the stock options expire on December 6, 2029. The shares vest 1/24th monthly over a period of two years after the grant date.

On December 6, 2019, the Company granted 40,000 shares of common stock to a director of the Company in the form of a stock option valued at $97,606. The exercise price per share is $2.65 and the stock options expire on December 6, 2029. The shares vest 1/48th monthly over a period of four years after the grant date.

On January 1, 2020, the Company granted 24,000 shares of common stock to a consultant in the form of a stock option valued at $67,976 to amend and restate a prior amended and restated Consulting Agreement dated as of August 17, 2018. The exercise price per share is $2.12 and the stock options expire on December 13, 2029. The shares vest 1/48th monthly over a period of four years, beginning on January 31, 2020 and on the last day of each month thereafter.

The Company utilizes the Black-Scholes model to value the stock options. The Company utilized the following assumptions:

During the six months ended February 29, 2020, $252,416 was expensed, and as of February 29, 2020, $481,418 remains unamortized. The intrinsic value of the 281,834 options as of February 29, 2020 is $0, and the weighted average value of the remaining life of the options is 9.41 years.

The following is a summary of stock option activity during the six months ended February 29, 2020:

The following table summarizes information relating to exercisable stock options as of February 29, 2020: