CAPITAL STOCK | NOTE 13 – CAPITAL STOCK Preferred Stock The Company is authorized to issue 10,000,000 0.001 On August 17, 2022, the Company filed a Certificate of Designation for a newly created Series C Non-Convertible Preferred Stock consisting of 100 0.001 The Series C Preferred Shares vote together with shares of our common stock as a single class on all matters presented to a vote of stockholders, except as required by law. The Series C Preferred Shares are not convertible into common stock, do not have any dividend rights and do have a nominal liquidation preference. The Series C Preferred Shares also have certain protective provisions, such as requiring the vote of a majority of Series C Preferred Shares to change or amend their rights, powers, privileges, limitations and restrictions. Issued Shares In connection with the Closing (see Note 4), on August 19, 2022, the Company issued each of Skycrest and Greyt, 50 shares of the Series C Preferred Shares. The Series C Preferred Shares are automatically redeemed by the Company for nominal consideration at such time as the holder owns less than 50% of the Shares purchased pursuant to its SPA and Shares issued or issuable upon exercise of the Consulting Warrants or in the event the holder transfers or seeks to transfer the Series C Preferred Shares, other than by the laws of descent and distribution. Common Stock On November 7, 2023, the Company filed a certificate of amendment to its Articles of Incorporation to affect a reverse split of our issued and outstanding common stock on a one-for-two-hundred basis. The reverse stock split was effective with FINRA on November 28, 2023 (the “Reverse Split”). The par value of the Company’s common stock was unchanged at $0.001 per share after the Reverse Split. Issuances of Common Stock - Sales: In November 2021, the Company sold an aggregate of 40,000 10.00 400,000 In January 2022, the Company sold an aggregate of 3,333 6.00 20,000 In February 2022, the Company sold an aggregate of 41,667 6.00 250,000 During August 2022, in connection with the Closing, the Company sold an aggregate of 1,000,000 4.00 4,000,000 During August 2022 and September 2022, the Company sold an aggregate of 327,500 8.00 2,620,000 Issuances of Common Stock – Stock Based Compensation: In connection with agreements entered into with two former sales executives (“Sales Executives”), the Sales Executives were each granted 5,000 7.00 35,000 45,000 90,000 149,100 Effective March 29, 2021, the Company and Assure Immune L.L.C (“Consultant”) executed an amendment of the Consultant’s Agreement, whereby the Company issued to the Consultants 100,000 12.28 1,228,000 614,000 On August 9, 2021, the Company entered into an additional consulting agreement with a third party to provide consulting services in connection with the development of international research and development, sales and distribution and financing opportunities for a period of six months. The 10,000 185,400 18.60 92,700 During February 2021, the Company entered into a consulting agreement with a third party to provide consulting services for a one-year period. As consideration for agreeing to provide consulting services to the Company, the Company agreed to issue the consultant 2,500 shares of unregistered common stock upon completion of the three-month anniversary of the agreement. The shares issued were valued at $ 19.00 47,500 11,875 On June 4, 2021, the Company and a former employee agreed to amendment of the employee’s employment agreement. Under the terms of the amendment, the employee agreed to extend the term of the agreement through December 31, 2022 and the Company agreed to grant the employee 5,000 27.20 136,000 100,211 On December 27, 2021, the Company and an employee agreed to an amendment of the employee’s employment agreement. Under the terms of the amendment, the employee agreed to extend the term of the agreement through December 31, 2024 and the Company agreed to increase the employee’s annual salary from $ 180,000 210,000 5,000 5.80 29,000 22,958 On March 17, 2022, the Company entered into a consulting agreement with a third party to assist the Company with certain services associated with the implementation of the PPX™ service platform as well as other customary day to day activities as reasonably requested. The term of the agreement expired on September 30, 2022 (“Initial Term”). As consideration for agreeing to provide consulting services to the Company during the Initial Term, the Company agreed to issue the consultant 35,000 3.60 126,000 126,000 On June 9, 2022, the Company entered into a consulting agreement with a company affiliated with Mr. Sinnreich in connection with past and future consulting and advisory services to be provided to the Company. In connection with the consulting agreement, for the months of June 2022 and July 2022, the Company issued the consultant 8,500 10,000 3.80 2.70 59,300 On July 21, 2022, in connection with the Term Sheet, Mr. Sinnreich was issued 50,000 6.80 343,000 On July 21, 2022, in connection with the Term Sheet, during the first year of the Initial Term, Mr. Sinnreich was to be compensated by the issuance of 120,000 shares of Organicell’s common stock upon execution of the Term Sheet, which shall vest pro-rata in equal monthly installments of 10,000 shares each. The shares issued were valued at $6.80 per share, the closing price of the common stock of the Company on the effective date of the Term Sheet, totaling $823,200. On November 22, 2022, Mr. Sinnreich resigned from the Company. The Company amortized the costs associated with the issuance through the date of Mr. Sinnreich’s termination. For the year ended October 31, 2023 and 2022, a total of 7,233 and 33,534 shares, respectively, had vested and the Company recorded $ 49,618 228,353 On August 18, 2022, the Company entered into a consulting agreement with a third party to provide strategic marketing and digital marketing services for a minimum period of six months. As consideration for agreeing to provide consulting services to the Company, the Company will pay the consultant $15,000 per month and issued the consultant 12,500 shares of unregistered common stock valued at $4.82 per share, the closing price of the common stock of the Company on the effective date of the agreement. All of the shares granted vested immediately on the date of issuance. The Company will record $60,250 of stock-based compensation expense based on the grant date fair value of these shares during the term of the consulting agreement. The Company recorded $ 35,146 25,104 On December 1, 2022, the Company granted 750 6.00 4,500 On December 29, 2022, the Company agreed to issue 25,000 100,000 4.00 Equity Line Of Credit Commitment: During November 2021, the Company entered into an term sheet agreement with Tysadco Partners LLC, a Delaware limited company (“Tysadco”) whereby Tysadco agreed to provide the Company with a $1 0,000,000 35,000 10.00 15,000 201,000 On September 1, 2022, the Company entered into a Purchase Agreement (the “Purchase Agreement”) with Tysadco and a Registration Rights Agreement (the “Registration Rights Agreement”) with Tysadco. Pursuant to the Purchase Agreement, Tysadco committed to purchase, subject to certain restrictions and conditions, up to $10,000,000 worth of the Company’s common stock (the “Commitment”), over a period of 24 months from the effectiveness of the registration statement registering the resale of shares purchased by Tysadco pursuant to the Purchase Agreement (the “Registration Statement”). Pursuant to the terms of the Registration Rights Agreement, the Company was obligated to use its commercially reasonable efforts to file a registration statement with the Securities and Exchange Commission within thirty (30) days after the date of such agreement, to register the resale by Tysadco of the shares of common stock issuable under the Purchase Agreement. On September 2, 2022, the Company filed the required registration statement and on October 24, 2022, the Registration Statement was declared effective (“Registration”). The Purchase Agreement provides that at any time after the effective date of the Registration Statement, from time to time on any business day selected by the Company (the “Purchase Date”), the Company shall have the right, but not the obligation, to direct Tysadco to buy the lesser of $1,000,000 in common stock per sale or 500% of the daily average share value traded for the 10 days prior to the closing request date, at a purchase price of 80% of the of the two lowest individual daily VWAPs during the ten (10) trading days preceding the draw down or put notice (“Valuation Period”), with a minimum request of $25,000 (“Request”). The payment for the shares covered by each request notice will occur on the business day immediately following the Valuation Period. Pursuant to the Purchase Agreement, on December 2, 2022, the Company submitted a put request to Tysadco to purchase 22,282 registered shares at a purchase price of $4.49, for a total of $100,000 (“Put Request”). On December 5, 2022, Tysadco funded the Put Request and the Company issued 22,282 shares to Tysadco. The proceeds from the share sale were used for working capital and general corporate purposes. Due to overall market conditions, the Company determined that it would not seek to obtain additional financing through the ELOC Purchase Agreement and the ELOC Registration lapsed and is no longer effective and the Company can no longer receive additional fundings pursuant to the ELOC. Shares Issued - Promissory Note – SPA 22: As described in Note 11, in connection with the issuance of the Promissory Note on January 11, 2022, the Company issued the Purchaser’s 15,385 123,000 Shares Issued – SPA 23: As described in Note 11, in connection with the issuance of the Note on March 6, 2023, the Company issued the Purchaser’s 75,000 169,500 Shares Issued – Amendment of consulting agreement: On August 19, 2022 the Company and a consultant (“Consultant”) agreed to an amendment to the consulting agreement whereby the Consultant was issued 25,000 20,000 The shares issued were valued at $4.70 per share, the closing price of the common stock of the Company on the effective date of the settlement, totaling $117,500. The Company recorded a gain of $72,500 for the year ended October 31, 2022 in connection with the settlement, representing the difference in the fair value of the shares issued and the amount of obligations settled. Shares Issued – Settlement of Litigation: As described in Note 15, during April 2022 the Company settled a lawsuit whereby the Company paid LAE $ 45,000 10,000 43,800 Shares Repurchased – Settlement of Litigation: As described in Note 15, effective October 13, 2022, the Company settled a lawsuit by agreeing to repurchase 124,000 500,000 Management and Consultants Performance Stock Plan On April 25, 2020, the Company approved the adoption of the Management and Consultants Performance Stock Plan (“MCPP”) providing for the grant to current senior executive members of management and third-party consultants shares of common stock of the Company (“Shares”) based on the achievement of certain defined operational performance milestones (“Milestones”). Pursuant to the MCPP, a total of 1,712,500 shares have been issued. On October 29, 2021, the MCPP (but not Awards of unexchanged shares of our common stock) was terminated. In connection with the Closing, the Company and each of the grantees of awards authorized but not yet issued under the MCPP (“Awards”) agreed to waive and terminate their respective Awards. 2021 Plan and Share Exchange Agreement In September 2021, the Company adopted the 2021 Equity Incentive Plan (“2021 Plan”). The 2021 Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, and Performance Shares (an “Award”) to any person who is an employee or director of, or consultant to the Company. The maximum aggregate number of shares that may be issued pursuant to all Awards was 1,250,000 The 2021 Plan is administered by (a) the board of the directors of the Company; or (b) a committee designated by the board, which Committee shall be constituted in such a manner as to satisfy the applicable laws and to permit such grants and related transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed, such committee shall continue to serve in its designated capacity until otherwise directed by the board. The board of directors may at any time amend, suspend, or terminate the Plan; provided, however, that no such amendment shall be made without the approval of the Company’s shareholders to the extent such approval is required by applicable laws. As of October 31, 2023, a total of 900,500 shares of our common stock (net of 181,500 shares of our common stock redeposited for future issuance) that have been awarded under the 2021 Plan remain issued and outstanding. As of October 31, 2022, a total of 417,000 Unvested Equity Instruments A summary of unvested equity instruments outstanding for the years ended October 31, 2023 and 2022 are presented below: Schedule of non vested share activity Number of Weighted- Outstanding at October 31, 2022 499,216 $ 11.35 Non-Vested Shares Granted - $ - Vested 169,983 $ 12.19 Expired/Forfeited 229,233 $ 10.35 Outstanding at October 31, 2023 100,000 $ 12.20 Number of Weighted- Outstanding at October 31, 2021 419,222 $ 12.34 Non-Vested Shares Granted 129,500 $ 6.86 Vested 49,506 $ 7.98 Expired/Forfeited - $ - Outstanding at October 31, 2022 499,216 $ 11.35 As of October 31, 2023, there was no unamortized compensation cost related to nonvested awards. As of October 31, 2022, the total compensation cost related to nonvested awards not yet recognized and the weighted-average period over which such costs are expected to be recognized was $855,030 and 7.0 months, respectively. |