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Note 5 - Stockholder Equity
12 Months Ended
Oct. 31, 2020
Equity [Abstract]  
Stockholder Equity

Note 5 – Stockholder Equity   

 

Additional Paid-In Capital

 

The Company’s Chief Executive Officer and Chief Financial Officer, Mr. Nirajkumar Patel, paid expenses on behalf of the Company totaling $16,257 during the year ended October 31, 2020, which is considered a contribution to the Company with no expectation of repayment and is recorded as additional paid-in capital.

 

The Company’s Chief Operating Officer, Mr. Eric Mosser, paid expenses on behalf of the Company totaling $10,900 during the year ended October 31, 2020, which is considered a contribution to the Company with no expectation of repayment and is recorded as additional paid-in capital.

 

The Company’s Chief Executive Officer, Mr. Nirajkumar Patel, paid expenses on behalf of the Company totaling $6,000 during the year ended October 31, 2019, which is considered a contribution to the Company with no expectation of repayment and is recorded as additional paid-in capital.

 

The Company’s Chief Operating Officer, Mr. Eric Mosser, paid expenses on behalf of the Company totaling $13,628 during the year ended October 31, 2019, which is considered a contribution to the Company with no expectation of repayment and is recorded as additional paid-in capital.

 

The Company’s former officer and director, Paul Moody, paid expenses on behalf of the Company totaling $7,335 during the year ended October 31, 2019, which is considered a contribution to the Company with no expectation of repayment and is recorded as additional paid-in capital.

 

Preferred Shares Issued

 

On August 19, 2020, upon approval by the Company’s Board of Directors, the Company filed the Certificate of Designation with the Secretary of State of the State of Delaware, which authorizes a total of 3,000,000 shares of Series A Preferred Stock.  (See Note 1, Post-Holding Company Reorganization, for more detail of the designated terms.)

 

On August 19, 2020, the Company issued 3,000,000 shares of its Series A Preferred Stock, to KH in exchange for its return of 300,000,000 shares of common stock to the Company. No cash consideration was paid during this exchange. At the time of issuance, the Company evaluated the nature of the Series A Preferred Stock, concluded that it was more akin to equity and recorded it as permanent equity.

 

Common Shares Issued

 

Restricted Stock Unit Awards 

 

On May 28, 2020, the Board of Directors approved the award of 8,500,000  restricted stock units (“RSUs”) under the Stock and Incentive Compensation Plan (the “Incentive Plan”) to six employees. The RSUs were awarded pursuant to restricted stock unit agreements (“RSU Agreement”), which provide for vesting over the course of three years, with a portion of the RSUs vesting every three months. The vesting schedules are set forth in the applicable RSU Agreements.

 

On June 1, 2020, the Board of Directors approved the award of 1,000,000 RSUs under the Incentive Plan to one newly-hired employee. The RSUs were awarded pursuant to a RSU Agreement, which provide for vesting over the course of three years, with a portion of the RSUs vesting every three months. The vesting schedules are set forth in the applicable RSU Agreement.

 

On July 26, 2020, the Company amended the RSU award agreements previously entered into with employees to include the option for employees of receiving a combination of cash and shares for their bonus, at the discretion of the Company. Any cash portion paid will be equal to the fair market value of the vested RSUs.  The Company evaluated the amendments under ASC 718 and determined the amendment did not qualify as a modification. Any difference in the amount paid in cash and the fair market value of the shares purchased is recorded as additional compensation.

 

As of June 1, 2020, the Board of Directors had approved a total of 9,500,000 granted RSUs for seven employees. These shares were valued at fair market value on the grant dates, using the closing share price for those dates, for a total of $1,359,600, which is to be vested over the vesting period. During the year ended October 31, 2020, 1,320,000 shares of common stock were issued to seven employees of the Company under the RSU agreements, resulting in $158,260 of share-based compensation. As of October 31, 2020, 8,430,000 RSUs remain to be vested.

 

Of the shares issued to employees, 226,000 shares were withheld by the Company to satisfy tax withholding obligations equal to $223,763.  The shares had a fair market value on the settlement date of $179,922. The difference in the amount paid and fair market value was $49,743 and was recorded as additional compensation.

 

During the year ended October 31, 2020, 3,824,056 shares of common stock were issued to two non-employee vendors as compensation for professional services rendered to the Company. These shares were expensed to the Company using the closing share price on the share issue dates to compute a total of $611,177.