Note 9 - Stockholders' Equity
|9 Months Ended|
May 31, 2017
|Note 9 - Stockholders' Equity||
NOTE 9 STOCKHOLDERS' EQUITY
The authorized preferred stock is 10,000,000 shares with a par value of $0.001. As of May 31, 2017 and August 31, 2016, the Company has no shares of preferred stock issued or outstanding.
The authorized common stock is 265,000,000 shares with a par value of $0.001. As of May 31, 2017 and August 31, 2016, 58,280,739 and 48,300,162 shares were issued and outstanding, respectively.
During the nine months ended May 31, 2017, the Company sold 1,766,250 shares of its common stock to investors in exchange for cash of $3,009,897.
The Company recorded stock compensation expense of $522,226 and $60,100 for the nine month periods ended May 31, 2017 and 2016, respectively, in connection with the issuance of shares of common stock and options to purchase common stock.
During the nine month period ended May 31, 2017, the Company issued 163,770 shares of common stock to consultants in exchange for $211,531 of services rendered and $169,955 of prepaid services, for a total of $381,486. The $211,531 of services rendered is included in stock compensation expense on the condensed consolidated statements of operations for the nine month period ended May 31, 2017. The $169,955 of prepaid services is included in prepaid expenses and other current assets on the condensed consolidated balance sheet as of May 31, 2017.
The Company estimates the fair value of share-based compensation utilizing the Black-Scholes option pricing model, which is dependent upon several variables such as the expected option term, expected volatility of our stock price over the expected option term, expected risk-free interest rate over the expected option term, expected dividend yield rate over the expected option term, and an estimate of expected forfeiture rates. The Company believes this valuation methodology is appropriate for estimating the fair value of stock options granted to employees and directors which are subject to ASC Topic 718 requirements. These amounts are estimates and thus may not be reflective of actual future results, nor amounts ultimately realized by recipients of these grants. The Company recognizes compensation on a straight-line basis over the requisite service period for each award. The following table summarizes the assumptions the Company utilized to record compensation expense for stock options granted during the nine months ended May 31, 2017 and 2016:
The expected life is computed using the simplified method, which is the average of the vesting term and the contractual term. The expected volatility is based on management's analysis of historical volatility for comparable companies. The risk-free interest rate is based on the U.S. Treasury yields with terms equivalent to the expected term of the related option at the time of the grant. While the Company believes these estimates are reasonable, the compensation expense recorded would increase if the expected life was increased, a higher expected volatility was used, or if the expected dividend yield increased.
During the nine months ended May 31, 2017 and 2016, the Company issued 2,940,000 and 520,000 stock options, respectively, pursuant to the Companys 2016 Stock Incentive Plan, which was adopted on February 9, 2016. A summary of the Companys stock option activity during the nine month period ended May 31, 2017 is presented below:
The weighted-average grant-date fair value of options granted during the nine months ended May 31, 2017 and 2016, was $0.96 and $0.46, respectively. The weighted-average grant-date fair value of options forfeited during the nine months ended May 31, 2017 was $0.51.
During the nine months ended May 31, 2017, the Company issued 40,000 shares of common stock in exchange for $44,000, pursuant to stock option exercises. In addition, the Company issued 10,557 shares of common stock pursuant to cashless exercises of 17,500 stock options.
A summary of the status of the Companys non-vested options as of August 31, 2016, and changes during the nine month period ended May 31, 2017, is presented below:
As of May 31, 2017, there was $1,826,924 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 1.9 years. The total fair value of shares vested during the nine month period May 31, 2017 is $310,859. This amount is included in stock compensation expense on the consolidated statements of operations.
The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.
Reference 1: http://www.xbrl.org/2003/role/presentationRef