Equity

9 Months Ended

Sep. 30, 2018

Note 8 – Equity

Common Shares

The Company has authorized 500,000,000 common shares at par value of $0.001 per share.

As at January 31, 2016, three shareholders of Savicell exercised their right to convert their shareholding in Savicell into common shares of the Company. Accordingly, the Company issued 1,756,619 common shares at $0.16 per share which equals to 80% of the share pricing of the financing completed on April 19, 2015. Total book value of the issued common shares is $281,059.

On March 31, 2016, one shareholder of Savicell exercised their right to convert their shareholding in Savicell into common shares of the Company. Accordingly, the Company issued 2,198,819 common shares at $0.16 per share which equals to 80% of the share pricing of the financing completed on April 19, 2015. Total book value of the issued common shares is $351,811.

On March 31, 2016, one shareholder of Savicell exercised their right to convert their shareholding in Savicell into common shares of the Company. Accordingly, the Company issued 318,742 common shares at $0.16 per share which equals to 80% of the share pricing of the financing completed on April 19, 2015. Total book value of the issued common shares is $50,999.

On April 18, 2016, the Company issued 625,000 common shares at $0.20 per share for total proceeds of $125,000.

On April 21, 2016, two shareholders of Savicell exercised their right to convert their shareholding in Savicell into common shares of the Company. Accordingly, the Company issued 824,992 common shares at $0.16 per share which equals to 80% of the share pricing of the financing completed on April 19, 2015. Total book value of the issued common shares is $131,999.

On April 22, 2016, one shareholder of Savicell exercised their right to convert their shareholding in Savicell into common shares of the Company. Accordingly, the Company issued 318,749 common shares at $0.16 per share which equals to 80% of the share pricing of the financing completed on April 19, 2015. Total book value of the issued common shares is $50,999.

On June 6, 2016, eight shareholders of Savicell exercised their right to convert their shareholding in Savicell into common shares of the Company. Accordingly, the Company issued 1,115,625 common shares at $0.16 per share which equals to 80% of the share pricing of the financing completed on April 19, 2015. Total book value of the issued common shares is $178,500.

On June 14, 2016, the Company issued 2,500,000 common shares at $0.20 per share for total proceeds of $500,000.

On July 5, 2016, stock options previously granted by the Company were exercised resulting in the issuance of 50,000 common shares at $0.01 per share for total proceeds of $500.

On July 7, 2016, one shareholder of Savicell exercised their right to convert their shareholding in Savicell into common shares of the Company. Accordingly, the Company issued 839,375 common shares at $0.16 per share which equals to 80% of the share pricing of the financing completed on April 19, 2015. Total book value of the issued common shares is $134,300.

On September 1, 2016, eight shareholders of Savicell exercised their right to convert their shareholding in Savicell into common shares of the Company. Accordingly, the Company issued 4,653,732 common shares at $0.16 per share which equals to 80% of the share pricing of the financing completed on April 19, 2015. Total book value of the issued common shares is $744,597.

On April 3, 2017, one shareholder of Savicell exercised their right to convert their shareholding in Savicell into common shares of the Company. Accordingly, the Company issued 288,830 common shares at $0.16 per share. Total book value of the issued common shares is $46,213.

On April 3, 2017, the Company issued 1,693,750 units at $0.20 per unit for total proceeds of $338,750. Each unit comprises one share and one warrant to purchase a further share at a price of $0.20. Each warrant entitles the holder to acquire one additional share of common stock at a price of $0.20 per share until April 3, 2019. $158,750 was received in December 2016.

On May 4, 2017, the Company issued an aggregate of 1,250,000 common shares at a price of $0.20 per share for gross proceeds of $250,000.

On August 3, 2017, the Company issued an aggregate of 600,000 common shares at a price of $0.20 per share for gross proceeds of $120,000.

On September 21, 2017, an employee exercised 150,000 options and accordingly received 150,000 common shares at an exercise price of $0.01 per share for aggregate consideration of $1,500.

On December 27, 2017, the Company issued an aggregate of 1,000,000 common shares at a price of $0.20 per share for gross proceeds of $200,000.

On April 17, 2018, stock options previously granted by the Company were exercised resulting in the issuance of 481,179 common shares at $0.01 per share for total proceeds of $4,812.

On May 18, 2018, the Company issued 117,660 shares at $0.20 per share for an aggregate amount of $23,532 in lieu of consulting services rendered up to June 30, 2018 and for future consulting services to be rendered up to December 31, 2018.

On August 1, 2018, the Company issued an aggregate of 2,300,000 units at a price of $0.20 per unit for gross proceeds of $460,000. Each unit is comprised of one common share of the Company and one non-transferable common share purchase warrant with each warrant being exercisable into one additional share at an exercise price of $0.20 per warrant share for a period of two years after the closing of the financing.

On August 22, 2018, the Company issued 16,665 common shares at $0.20 per share for total proceeds of $3,333 for stock options that were exercised in the quarter ended June 30, 2018.

On August 23, 2018, stock options previously granted by the Company were exercised resulting in the issuance of 800,000 common shares at $0.01 per share for total proceeds of $8,000.

As at September 30, 2018, the Company has 122,878,912 common shares (December 31, 2017 – 119,163,408) issued and outstanding.

Warrants

A summary of warrants as at September 30, 2018 and December 31, 2017 is as follows:

	Warrant Outstanding

			Weighted Average
	Number of warrant		Exercise Price
Balance, December 31, 2017	1,693,750	$	0.20
Issued	2,387,500		0.20
Balance, September 30, 2018	4,081,250	$	0.20

Number	Exercise	Expiry	Remaining
Outstanding	Price	Date	Life
1,693,750	$0.20	April 3, 2019	0.51
750,000	$0.20	July 31, 2020	1.84
1,550,000	$0.20	August 21, 2020	1.89
87,500	$0.20	September 17, 2021	2.97
4,081,250

On September 17, 2018, the Company granted a total of 87,500 warrants to a consultant, exercisable at a price of $0.20 per share. The expire date of the warrants is September 17, 2021.

Preferred Shares

The Company has authorized 20,000,000 preferred shares at a par value of $0.001 per share. No preferred shares have been issued by the Company and accordingly none are outstanding.

Stock Options

In August 2015, the Company granted a total of 1,730,000 stock options to four advisors of the Company. The stock options are exercisable at an exercise price of $0.20 per share and may be exercised for six-seven years. One third of the options will vest at end of each completed year for which the consultant provides the services. The options were valued based on the Black Scholes model. For nine months ended September 30, 2018, the Company recorded stock based compensation of $8,547 (2017: $36,184) for such options.

On September 1, 2015 the Company granted a total of 150,000 stock options to two employees. The stock options are exercisable at an exercise price of $0.20 per share and may be exercised for seven years. One third of the options will vest at the grant date of each of September 1, 2015, September 1, 2016 and September 1, 2017 that the employee remains an employee of the Company or its subsidiaries. As of June 30, 2017, one of these employees is no longer with the Company and as such 75,000 options has expired. The options were valued based on the Black Scholes model. As of September 30, 2018, the Company has fully recorded the stock based compensation for such options.

On November 22, 2015 the Company granted a total of 50,000 stock options to an employee. The stock options are exercisable at an exercise price of $0.20 per share and may be exercised for seven years. One third of the options will vest at the grant date of each of November 22, 2016, November 22, 2017 and November 22, 2018 that the employee remains an employee of the Company or its subsidiaries. The options were valued based on the Black Scholes model. For the nine months ended September 30, 2018, the Company recorded stock based compensation of $663 (2017: $2,038) for such options.

On December 1, 2015 the Company granted a total of 125,000 stock options to an employee. The stock options are exercisable at an exercise price of $0.20 per share and may be exercised for seven years. One third of the options will vest at the grant date of each of December 1, 2016, December 1, 2017 and December 1, 2018 that the employee remains an employee of the Company or its subsidiaries. The options were valued based on the Black Scholes model. For the nine months ended September 30, 2018, the Company recorded stock based compensation of $1,619 (2017: $5,144) for such options.

On December 6, 2015 the Company granted a total of 100,000 stock options to an employee. The stock options are exercisable at an exercise price of $0.20 per share and may be exercised for seven years. One third of the options will vest at the grant date of each of December 6, 2016, December 6, 2017 and December 6, 2018 that the employee remains an employee of the Company or its subsidiaries. The options were valued based on the Black Scholes model. For the nine months ended September 30, 2018, the Company recorded stock based compensation of $1,332 (2017: 4,267) for such options.

On February 15, 2016 the Company granted a total of 50,000 stock options to an employee. The stock options are exercisable at an exercise price of $0.20 per share and may be exercised for seven years. One third of the options will vest on each of the first, second and third anniversaries of the date of grant provided the employee remains an employee of the Company or its subsidiaries. The options were valued based on the Black Scholes model. During the quarter ended March 31, 2018, 16,665 options were exercised at $0.20 per share resulting in total proceeds of $3,333. The remainder options 33,335 were cancelled and no stock based compensation was recorded for the quarter.

On March 7, 2016 the Company granted a total of 75,000 stock options to two employees. The stock options are exercisable at an exercise price of $0.20 per share and may be exercised for seven years. One third of the options will vest on each of the first, second and third anniversaries of the date of grant provided the employee remains an employee of the Company or its subsidiaries. The options were valued based on the Black Scholes model. For the nine months ended September 30, 2018, the Company recorded stock based compensation of $811 (2017: $2,744) for such options.

On May 5, 2016 the Company granted a total of 150,000 stock options to an employee. The stock options are exercisable at an exercise price of $0.20 per share and may be exercised for ten years. 30,000 options vest immediately. One third of the remaining options will vest on each of the first, second and third anniversaries of the date of grant provided the employee remains an employee of the Company or its subsidiaries. The options were valued based on the Black Scholes model. For the nine months ended September 30, 2018 the Company recorded stock based compensation of $1,701 (2017: $7,216) for such options.

On June 6, 2016 the Company granted a total of 800,000 stock options to a consultant. The stock options are exercisable at the exercise price of $0.20 per share and may be exercised for five years. 480,000 of the options so granted will vest as to one quarter of such options at the end of each completed year that the consultant provides the services. The remaining 320,000 options will be fully vested when the consultant has completed the provision of a minimum of 600 blood samples of lung cancer and control patients during the 4 years following June 6, 2016. One twelfth of these options will vest upon each 50 blood samples having been delivered by the consultant to the Company. The options were valued based on the Black Scholes model. For the nine months ended September 30, 2018, the Company recorded stock based compensation of $20,268 (2017: $22,870) for such options.

On November 1, 2016, the Company granted a total of 360,000 stock options to an employee. The stock options are exercisable at an exercise price of $0.20 per share and may be exercised for seven years. One half of the options will vest immediately and one-half shall vest on the on the first anniversary date of grant provided the grantee remains a board member of the Company or its subsidiaries. The options were valued based on the Black Scholes model. As of December 31, 2017, the Company has fully recorded the stock based compensation for such options.

On May 31, 2017, the Company granted a total of 875,000 stock options to six employees. The stock options are exercisable at an exercise price of $0.20 per share and may be exercised for seven years. One third of the options will vest on each of the first, second and third anniversaries of the date of grant, namely May 31, 2018, May 31, 2019 and May 31, 2020 provided the employee remains an employee of the Company or its subsidiaries. The options were valued based on the Black Scholes model. For the nine months ended September 30, 2018 the Company recorded stock based compensation of $41,755 (2017: $43,283) for such options.

On July 2, 2017, the Company granted a total of 150,000 stock options to an employee. The stock options are exercisable at an exercise price of $0.20 per share and may be exercised for seven years. One third of the options will vest on the date of grant, namely July 2, 2018, July 2, 2019 and July 2, 2020 provided the employee remains an employee of the Company or its subsidiaries. The options were valued based on the Black Scholes model. For the nine months ended September 30, 2018 the Company recorded stock based compensation of $7,705 (2017: $6,269) for such options.

On July 12, 2017, the Company granted a total of 260,000 stock options to an employee. The stock options are exercisable at an exercise price of $0.20 per share and may be exercised for ten years. 50,000 options vested on grant date. Off the remaining 210,000, one third of the options will vest on the date of grant, namely July 12, 2018, July 12, 2019 and July 12, 2020 provided the employee remains a consultant of the Company or its subsidiaries. The options were valued based on the Black Scholes model. For the nine months ended September 30, 2018, the Company recorded stock based compensation of $10,662 (2017: $18,818) for such options.

On February 13, 2018, the Company granted a total of 231,250 stock options to a consultant. The stock options vest immediately and are exercisable at an exercise price of $0.20 per share and may be exercised over five years. The options were valued based on the Black Scholes model. For the nine months ended September 30, 2018, the Company recorded stock based compensation of $26,422 for such options.

On June 22, 2018, the Company granted a total of 4,100,000 stock options to a group of employees. The stock options are exercisable at an exercise price of $0.20 per share and may be exercised for seven years. One third of the options will vest on each of the first, second and third anniversaries of the date of grant, namely June 22, 2019, June 22, 2020 and June 22, 2021 provided the employees remains an employee of the Company or its subsidiaries. The options were valued based on the Black Scholes model. For the nine months ended September 30, 2018, the Company recorded stock based compensation of $95,589 for such options.

On June 22, 2018, the Company granted a total of 1,500,000 stock options to an employee. The stock options are exercisable at an exercise price of $0.20 per share and may be exercised for seven years. One quarter of the options will vest immediately. The remaining 1,125,000 options will vest in equal amounts on each of June 22, 2019, June 22, 2020 and June 22, 2021 provided the employee remains an employee of the Company or its subsidiaries. The options were valued based on the Black Scholes model. For the nine months ended September 30, 2018, the Company recorded stock based compensation of $78,476 for such options.

On June 22, 2018, the Company granted a total of 200,000 stock options to a consultant. The stock options are exercisable at an exercise price of $0.20 per share and may be exercised for seven years. One third of the options will vest on each of June 22, 2019, June 22, 2020 and June 22, 2021. The options were valued based on the Black Scholes model. For the nine months ended September 30, 2018, the Company recorded stock based compensation of $4,544 for such options.

On June 22, 2018, the Company granted a total of 4,000,000 stock options to a consultant. The stock options are exercisable at an exercise price of $0.20 per share and may be exercised for seven years. One quarter of the options vest on the date of grant, and a further quarter will vest on each of June 22, 2019, June 22, 2020 and June 22, 2021.

The options were valued based on the Black Scholes model. For the nine months ended September 30, 2018, the Company recorded stock based compensation of $207,432 for such options.

On June 22, 2018, the Company granted a total of 4,600,000 stock options to a group of employees, consultants and directors. The stock options are exercisable at an exercise price of $0.20 per share and may be exercised for seven years. The options vest immediately on grant date. The options were valued based on the Black Scholes model. For the nine months ended September 30, 2018, the Company recorded stock based compensation of $640,896 for such options.

On July 18, 2018, the Company granted a total of 360,000 stock options to a consultant. The stock options are exercisable at an exercise price of $0.20 per share and may be exercised for ten years. 150,000 of the options vest on the date of grant, and one third of the options will vest at the end of each year of service as at July 18, 2019, 2020 and 2021. The options were valued based on the Black Scholes model. For the nine months ended September 30, 2018, the Company recorded stock based compensation of $29,662 for such options.

On September 12, 2018, the Company granted a total of 150,000 stock options to a consultant. The stock options are exercisable at an exercise price of $0.20 per share and may be exercised for ten years. 30,000 of the options vest on the date of grant, and 40,000 of the options will vest at the end of each year of service as at September 12, 2019, 2020 and 2021. The options were valued based on the Black Scholes model. For the nine months ended September 30, 2018, the Company recorded stock based compensation of $5,696 for such options.

On September 14, 2018, the Company granted a total of 105,000 stock options to a consultant. The stock options are exercisable at an exercise price of $0.20 per share and expired on April 25, 2023. 15,000 options vested at the end of each 7 months of services. The options were valued based on the Black Scholes model. For the nine months ended September 30, 2018, the Company recorded stock based compensation of $317 for such options.

	Number of Options			Weighted	Expire date
				Average Exercise
				Price
Balance, December 31, 2016	17,345,896		$	0.05
Granted, on May 31, 2017	875,000			0.20	May 31, 2024
Expired, July 1, 2017	(75,000	)		0.20	July 1, 2017
Granted, on July 2, 2017	150,000			0.20	July 2, 2024
Granted, on July 12 ^th , 2017	260,000			0.20	July 12, 2027
Exercised, on September 25, 2017	(150,000	)		0.01	September 25, 2017
Balance, December 31, 2017	18,405,896		$	0.04
Granted, on February 13, 2018	231,250			0.20	February 13, 2023
EExercised, on January 28, 2018	(16,665	)		0.20
Cancelled, on January 28, 2018	(33,335	)		0.20
Expired, on September 28, 2018	(25,000	)		0.20
Granted, on June 22, 2018	14,400,000			0.20	June 22, 2025
Exercised, on March 20, 2018	(481,179	)		0.01
Exercised, on August 14, 2018	(800,000	)		0.01
Granted, on July 18, 2018	360,000			0.20	July 18, 2028
Granted, on September 12, 2018	150,000			0.20	September 12, 2028
Granted, on September 14, 2018	105,000			0.20	April 25, 2023
Balance, September 30, 2018	32,295,967		$	0.12

	Outstanding September 30, 2018				Exercisable as at September 30, 2018
				Weighted				Weighted
			Weighted	Average			Weighted	Average
			Average	Remaining			Average	Remaining
Exercise	Number of		Exercise	Contractual	Number of		Exercise	Contractual
Price	Options		Price	Life (years)	Options		Price	Life (years)
$0.01	9,750,000	$	0.01	3.92	9,750,000	$	0.01	3.92
0.01	1,924,717		0.01	2.12	1,924,717		0.01	2.12
0.01	500,000		0.01	0.25	500,000		0.01	0.25
0.20	150,000		0.20	1.56	150,000		0.20	1.56
0.20	120,000		0.20	2.90	120,000		0.20	2.90
0.20	1,610,000		0.20	3.85	1,610,000		0.20	3.85
0.20	75,000		0.20	3.92	75,000		0.20	3.92
0.20	50,000		0.20	4.15	33,334		0.20	4.15
0.20	125,000		0.20	4.17	83,334		0.20	4.17
0.20	100,000		0.20	4.19	66,666		0.20	4.19
0.20	75,000		0.20	4.44	50,000		0.20	4.44
0.20	150,000		0.20	7.60	110,000		0.20	7.60
0.20	800,000		0.20	2.68	506,670		0.20	2.68
0.20	360,000		0.20	5.09	360,000		0.20	5.09
0.20	850,000		0.20	5.67	283,333		0.20	5.67
0.20	150,000		0.20	5.76	50,000		0.20	5.76
0.20	260,000		0.20	8.79	120,000		0.20	8.79
0.20	231,250		0.20	4.38	231,250		0.20	4.38
0.20	4,100,000		0.20	6.73	-		-	6.73
0.20	1,500,000		0.20	6.73	375,000		0.20	6.73
0.20	200,000		0.20	6.73	-		-	6.73
0.20	4,000,000		0.20	6.73	1,000,000		0.20	6.73
0.20	4,600,000		0.20	6.73	4,600,000		0.20	6.73
0.20	360,000		0.20	9.81	150,000		0.20	9.81
0.20	105,000		0.20	4.57	-		0.20	4.57
0.20	150,000		0.20	9.96	30,000		0.20	9.96
	32,295,967	$	0.12	5.19	22,179,304	$	0.09	4.53

The fair value of each option grant is calculated using the following assumptions:

	2018	2017
Expected life – year	5 - 10	7 - 10
Interest rate	1.53% - 2.86%	1.60 - 2.40%
Volatility	65.68% - 94.22%	73.01 - 90.69%
Dividend yield	- -%	- -%
Forfeiture rate	- -%	- -

Non-Controlling Interests

The Company’s subsidiary, Savicell, granted a third party a warrant certificate to purchase 1,765 common shares of Savicell that initially represented 15% of the underlying common equity of Savicell. In the course of its initial equity issuances up to October 30, 2012 (the “Initial Closing”), Savicell issued a total of 592 ordinary shares at $1,698.97 per share to the non-related third party representing approximately 4.79% of the fully diluted common equity of Savicell for aggregate proceeds of $1,005,795. The Savicell investors are entitled to convert their Savicell shares into common shares of ODT (1:10,625) at a price equal to 80% of the per share pricing of the first completed ODT financing of over $500,000 conducted after July 1, 2012 (the “Financing Price”) provided that for purposes of such conversion, the deemed maximum Financing Price shall be the per share price of the common shares of ODT based on (a) an aggregate ODT equity valuation of $30,000,000 ; and (b) the number of common shares of ODT outstanding at the time of the financing. Savicell continued its equity issuances following the Initial Closing.

As at December 31, 2012, Savicell had issued a total of 684 shares at $1,698.97 per share representing approximately 5.11% of the fully diluted common equity of Savicell for aggregate proceeds of $1,162,192.

During the year ended December 31, 2013, Savicell issued a total of 760 shares at $1,700 per share representing approximately 5.68% of the fully diluted common equity of Savicell for aggregate proceeds of $1,292,000.

During the year ended December 31, 2014, Savicell issued a total of 183 shares at $1,699 per share representing approximately 1.37% of the fully diluted common equity of Savicell for aggregate proceeds of $310,977.

During the year ended December 31, 2015, Savicell issued a total of 417 shares at $1,700 per share to third parties for aggregate proceeds of $709,087. As at December 31, 2015, Savicell also issued 516 shares at $1,700 to ODT, which of $532,084 has not been received as at December 31, 2015. In addition, Savicell investors exchanged 588 Savicell shares for 6,248,672 of ODT common shares with ODT receiving the Savicell shares so exchanged. Following these share issuances, the Company, the Warrant holder and the Savicell investors held underlying interests in the equity of Savicell of 77.00%, 12.6% and 10.4% respectively (December 31, 2014 - 74.67%, 13.18% and 12.15%) .

During the year ended December 31, 2016, Savicell investors exchanged 1,132 Savicell shares for 12,026,654 of ODT common shares with ODT receiving the Savicell shares so exchanged. As at December 31, 2016, Savicell received $1,786,656 from ODT and issued 1,051 shares to ODT in return. Following these share issuances, the Company, the Warrant holder and the Savicell investors held underlying interests in the equity of Savicell of 86.65%, 11.72% and

2.15%, respectively (December 31, 2015 - 77%, 12.6% and 10.4%) . As a result, ODT’s shareholding increased, which increased the additional paid-in capital during the year.

During the year ended December 31, 2017, Savicell investors exchanged 27 Savicell shares for 288,830 of ODT common shares with ODT receiving the Savicell shares so exchanged. As at December 31, 2017, Savicell received $658,711 from ODT and issued 387 shares to ODT in return. As at December 31, 2017, the Company, the Warrant holder and the Savicell investors held underlying interests in the equity of Savicell of 86.65%, 11.42% and 1.93%, respectively (December 31, 2016 - 86.13%, 11.72% and 2.15%) .

As at September 30, 2018, The Company, the Warrant holder and the Savicell investors held underlying interests in the equity of Savicell of 86.65%, 11.42% and 1.93%, respectively (December 31, 2017 - 86.65%, 11.42% and 1.93%) .

Savicell’s Common Shares

	Number		Amount
	of Shares

Balance, December 31, 2015	14,012	$	3,819,454
Shares issued to settle inter-company debts	1,051		1,786,656

Balance, December 31, 2016	15,063		5,606,110
Shares issued to settle inter-company debts	387		658,711

Balance, September 30, 2018 and December 31, 2017	15,450		6,264,821

As the exercise price inherent in the warrant certificate to purchase 1,765 common shares of Savicell is at nominal value, the warrant certificate is valued at the price of the subsequent equity issuance by Savicell ($1,698.97 per share) and the related common shares are considered to be issued and outstanding.

ONLINE DISRUPTIVE TECHNOLOGIES, INC. 10-Q