SHARE-BASED COMPENSATION

6 Months Ended

Feb. 28, 2022

Share-based Payment Arrangement [Abstract]

NOTE 9 – SHARE-BASED COMPENSATION

Stock Options

During the six months ended February 28, 2022, the Company granted options for the purchase of the Company’s common stock to certain employees and consultants as consideration for services rendered. The terms of the stock option grants are determined by the Company’s Board of Directors. The Company’s stock options generally vest upon the one-year anniversary date of the grant and have a maximum term of fifteen months.

The following summarizes the stock option activity for the six months ended February 28, 2022:

Summary of Stock option activity
	Options Outstanding		Weighted-Average Exercise Price
Balance as of August 31, 2021		175,000	$	0.10
Grants		100,000		0.10
Exercised		-		-
Forfeited		-		-
Balance as of February 28, 2022		275,000	$	0.10

The total share-based compensation expense in connection with issuance of stock options recognized during the six months ended February 28, 2022 was $23,558. The fair value of each stock option is estimated on the date of grant using the Black-Scholes-Merton option pricing model with the following weighted average assumptions for stock options granted during the six months ended February 28, 2022:

Summary of weighted average assumptions
Expected term (years)	1.25 years
Expected stock price volatility	110-195	%
Weighted-average risk-free rate	0.10-0.20	%
Expected dividend	-

Volatility is a measure of the amount by which a financial variable such as share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The Company estimates expected volatility giving primary consideration to the historical volatility of its common stock. The risk-free interest rate is based on the published yield available on U.S. Treasury issues with an equivalent term remaining equal to the expected life of the stock option. The expected lives of the stock options represent the estimated period of time until exercise or forfeiture and are based on the simplified method of using the mid-point between the vesting term and the original contractual term.

The following summarizes certain information about stock options vested and expected to vest as of February 28, 2022:

Summary of stock option vested
	Number of Options		Weighted-Average Remaining Contractual Life (in Years)		Weighted-Average Exercise Price
Outstanding		275,000		0.09	$	0.10
Exercisable		275,000		0.09	$	0.10
Expected to vest		0		0.09	$	0.10

Restricted Stock Awards

The following summarizes the restricted stock activity for the six months ended February 28, 2022:

Summary of restricted stock activity
			Weighted-Average
	Shares		Exercise Price
Balance as of August 31, 2021		450,000	$	1.25
Shares of restricted stock granted		-		-
Exercised		-		-
Cancelled		-		1.25
Balance as of February 28, 2022		450,000	$	1.25

Schedule of restricted stock awards
	February 28,		August 31,
Number of Restricted Stock Awards	2022		2021
Vested		450,000		450,000
Non-vested		-		-
		450,000		450,000

As of February 28, 2022 and August 31, 2021, there was unrecognized compensation cost of $0, related to non-vested share-based compensation, respectively, which is expected to be recognized over the next year. In addition, none of the restricted share awards presented above has been issued or outstanding as of February 28, 2022.

Warrants

One January 20, 2022, The Company entered into two separate common stock purchase warrant agreement with an two unrelated third parties to purchase up to 1,750,000 warrant shares each with an exercise price of $0.001 per share. The warrants totaling 3,500,000 shares were valued at $635,282. These warrants may also be exercised, in whole or in part, at such time by means of a cashless exercise in which the holder shall be entitled to receive a number of warrant shares equal to the VWAP on the trading day immediately preceding the date of the applicable Notice of exercise and the exercise price of this warrant and the number of warrant shares that would be exercised by means of cash. The warrants expire January 20, 2023.

BOATIM INC. 10-Q