| Stockholders' Deficit | Note 10 – Stockholders’ Deficit Convertible preferred stock The Company has authorized 1,000,000 shares
of $0.001 par value convertible preferred stock. As of August 31, 2018 and 2017 there were 0 and 0 convertible preferred shares
issued and outstanding, respectively. Common stock The Company has authorized 499,000,000 shares
of $0.001 par value common stock. As of August 31, 2018 and 2017 there were 207,881,743 and 201,837,254 common shares issued and
outstanding, respectively. During the year ended August 31, 2018, the
Company:
● issued 384,110 shares of common stock for the acquisition of Executive Fitness Leaders valued at $233,155. The value was based on the closing price of the Company’s common stock on the acquisition date. The shares were issued on December 5, 2017;
● issued 12,452,356 shares of common stock for the conversion of debt totaling $5,122,899. The per share price used for the conversion was $0.4114 which was determined as the average price of the five (5) trading days immediately preceding the date of conversion with a 10% premium added to the calculated per share price. The shares were issued on February 9, 2018;
● issued 25,104 shares of common stock for a $15,564 for cash proceeds of $15,564;
● cancelled 6,817,084 shares of common stock for no consideration that were being held as security in connection with a loan agreement. During the year ended August 31, 2017 the Company
issued:
● 22,751,307 shares of common stock in connection with the reverse merger transaction; and
● 11,288,541 shares of common stock for cash proceeds of $3,386,560. Stock Options and Warrants On September 8, 2015, the Company adopted the
2015 Incentive Compensation Plan (the “2015 Plan”), which authorizes the issuance of up to 5,000,000 shares of common
stock to employees, officers, directors or independent consultants of the Company, provided that no person can be granted shares
under the 2015 Plan for services related to raising capital or promotional activities. During 2018 and 2017, the Company did not
grant any awards under the 2015 Plan. As of August 31, 2018, 4,987,500 shares were available under the 2015 Plan for future grants,
awards, options or share issuances. However, because the shares issuable under the 2015 Plan or issuable upon conversion of awards
granted under the Plan are no longer registered under the Securities Exchange Act of 1934, as amended, the Company does not intend
to issue any additional grants under the 2015 Plan. On January 16, 2018, the Company adopted the
Novo Integrated Sciences, Inc. 2018 Incentive Plan (the “2018 Plan”). Under the 2018 Plan, 10,000,000 shares of common
stock are authorized for issuance to employees, non-employees, directors and key consultants to the Company or its subsidiaries.
The 2018 Plan authorizes equity-based and cash-based incentives for participants. There were 9,950,000 shares available for award
at August 31, 2018 under the 2018 Plan. The following is a summary of stock option/warrant
activity:
Weighted
Weighted Average
Options/ Average Remaining Aggregate
Warrants Exercise Contractual Intrinsic
Outstanding Price Life Value
Outstanding, August 31, 2016 -
Transfer from reverse merger transactions 6,610,000 $ 0.24
Granted 1,250,000 $ 0.42
Forfeited -
Exercised -
Outstanding, August 31, 2017 7,860,000 $ 0.27 3.53 $ 660,000
Granted 2,170,000 0.42
Forfeited -
Exercised -
Outstanding, August 31, 2018 10,030,000 0.30 4.56 $ 7,045,500
Exercisable, August 31, 2018 10,030,000 $ 0.30 4.56 $ 7,045,500 The exercise price for options/warrants outstanding
at August 31, 2018:
Outstanding and Exercisable
Number of
Options/ Exercise
Warrants Price
5,500,000 $ 0.16
1,000,000 0.32
50,000 0.33
120,000 0.40
2,000,000 0.42
100,000 0.50
1,000,000 0.62
250,000 0.80
10,000 2.00
10,030,000 For options granted during fiscal year 2018
where the exercise price equaled the stock price at the date of the grant, the weighted-average fair value of such options was
$0.41 and the weighted-average exercise price of such options/warrants was $0.42. No options were granted during fiscal year 2018
where the exercise price was less than the stock price at the date of grant or the exercise price was greater than the stock price
at the date of grant. For options granted during fiscal year 2017
where the exercise price equaled the stock price at the date of the grant, the weighted-average fair value of such options was
$0.58 and the weighted-average exercise price of such options/warrants was $0.42. No options were granted during fiscal 2017 where
the exercise price was less than the stock price at the date of grant or the exercise price was greater than the stock price at
the date of grant. The fair value of the stock options is being
amortized to stock option expense over the vesting period. The Company recorded stock option expense of $1,274,931 and $252,428
during the years ended August 31, 2018 and 2017, respectively. At August 31, 2018, the unamortized stock option expense was $0. The assumptions used in calculating the fair
value of options granted using the Black-Scholes option- pricing model for options granted are as follows:
2018 2017
Risk-free interest rate 1.83 % 1.50 %
Expected life of the options 2.5 to 3.5 years 2.5 years
Expected volatility 314 % 323 %
Expected dividend yield 0 % 0 % During the year ended August 31, 2018, the
Company extended the expiration date of 5,600,000 options by three years. The change in fair value between the options using the
original terms and the options using the new expiration dates was $31,536 which has been recorded as expense in the accompanying
consolidated statement of operations. |
