Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

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Stockholders' Equity
6 Months Ended
Feb. 28, 2018
Notes to Financial Statements  
Note 4: Stockholders' Equity

Preferred Stock

 

In September of 2016, the Company issued options to purchase preferred stock at $0.0001 per share. This issuance was approved by our shareholders. The number of options is equal to the lesser of (a) the number of shares of common stock held by such Shareholder on September 28, 2016, which accounts for approximately 25.6 million shares, or (b) the number of shares of common stock held by such Shareholder on date of the Shareholder’s exercise of the aforesaid option. The preferred stock that is the subject of such contingent option provides a right to elect a majority of the directors on the Board of Directors of the Corporation and does not include any rights to dividends, conversion to shares of common stock, or preference upon liquidation of the Corporation. The contingent option is exercisable only upon the acquisition of a 20% or greater voting interest in the Corporation by a party other than the founding shareholders, or prior to any proposed merger, consolidation (in which the Corporation’s common stock is changed or exchanged) or sale of at least 50% of the Corporation’s assets or earning power (other than a reincorporation). The right to exercise the option terminates on December 31, 2023.

 

Common Stock and Warrants

 

During the six months ended February 28, 2018, the Company issued 25,000 shares of common stock following the exercise of warrants with an exercise price of $2 and received gross proceeds of $50,000.

 

On March 16, 2017, the Company granted 50,000 common shares, through the ShiftPixy, Inc., 2017 Stock Option /Stock Issuance Plan (the “Plan”) to Kenneth W. Weaver, of which 25,000 common shares were committed at an assumed fair market value of $3.80 per share, and deemed to have been purchased and vested on December 5, 2017 as a consequence of Mr. Weaver’s continued service as director through that date. During the six months ended February 28, 2018, the Company recognized 13,252 shares of common stock for services that vested during the six months ended February 28, 2018, at a fair value of $50,354. There was no common stock issued for services during the three and six months ended February 28, 2017.

 

On September 28, 2017, the Company granted each 26,316 common shares, through the ShiftPixy, Inc., Plan to each of our two other independent directors, Whitney White and Sean Higgins at a fair value of $2.95 per share, of which 50% will vest on the date marking the six months anniversary and the remaining 50% of the shares vesting on the first anniversary of service under the executed agreement. For the six months ended February 28, 2018, the Company recognized $97,095 of compensation expense in our statement of operation.

   

During the three and six months ended February 28, 2017, the Company sold 131,750 shares of common stock for $527,000 in cash. Each share includes one warrant to purchase a share of common stock at an exercise price of $4 per share expiring on March 1, 2019.

 

The following tables summarize our warrants outstanding as of February 28, 2018:

 

   

Number of

shares

    Weighted average remaining life (years)     Weighted average exercise price  
Warrants outstanding, August 31, 2017,     2,595,413       1.0     $ 2.99  
Issued     -       -       -  
(Exercised)     (25,000 )     -     $ 2.00  
(Cancelled)     -       -       -  
(Expired)     -       -       -  
Warrants outstanding, February 28, 2018,     2,570,413       1.0     $ 3.00  
                         
Warrants exercisable, February 28, 2018,     2,570,413       1.0     $ 3.00  

 

The following table summarizes information about warrants outstanding as of February 28, 2018:

 

Exercise price     Warrants Outstanding    

Weighted average life of

outstanding warrants in years

 
$ 2.00       931,300       1.0  
$ 3.00       1,003,800       1.0  
$ 4.00       535,313       1.0  
$ 6.90       100,000       1.0  
          2,570,413       1.0