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STOCK BASED COMPENSATION
 3 Months Ended
Sep. 30, 2022
STOCK BASED COMPENSATION  
STOCK BASED COMPENSATION

NOTE 9. STOCK BASED COMPENSATION

 

On June 10, 2022, the Company’s board of directors approved (i) The Healing Company Inc. 2022 Omnibus Equity Incentive Plan (the “2022 Plan”) and (ii) the granting, in general terms, of awards and options which were previously contractually agreed to be granted upon formal approval of the 2022 Plan (the “Awards”).

 

Stock Options and Stock Awards: 

 

During fiscal 2022 and the three months ended September 30, 2022, the Company granted the following Stock options and Stock awards under its 2022 Plan:

 

Type

Role

 

Number

of shares/options

Exercise

Price

/FMV

Vesting

start Date

Vesting

Schedule *

Term

Stock Award

 

Executive

 

1,250,000

 

$

 3.75

 

06/06/2022

 

A

 

N/A

 

Stock Award

 

Management

 

200,000

 

$

 3.75

 

04/04/2022

 

A

 

N/A

 

Stock Award

 

Executive Support

 

150,000

 

$

 3.75

 

11/27/2021

 

A

 

N/A

 

Stock Award

 

Executive

 

1,000,000

 

$

 3.75

 

09/01/2021

 

A

 

N/A

 

Stock Award

 

Management

 

250,000

 

$

 3.75

 

09/01/2021

 

F

 

N/A

 

Stock Award

 

Advisor

 

250,000

 

$

 3.75

 

04/01/2022

 

G

 

N/A

 

Stock Award

 

Executive

 

600,000

 

$

 3.75

 

07/05/2022

 

A

 

N/A

 

 

 

Total

 

3,700,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock Option

 

Management

 

1,000,000

 

$

 0.001

 

01/01/2022

 

A

 

10 years

 

Stock Option

 

Advisor

 

300,000

 

$

 0.001

 

09/01/2021

 

D

 

10 years

 

Stock Option

 

Recruitment Agency

 

16,250

 

$

0.001

 

06/05/2022

 

B

 

10 years

 

Stock Option

 

Marketing Agency

 

275,000

 

$

0.001

 

04/13/2022

 

C

 

10 years

 

Stock Option

 

Board Director

 

125,000

 

$

0.001

 

12/28/2021

 

H

 

10 years

 

Stock Option

 

Board Director

 

125,000

 

$

0.001

 

01/01/2022

 

H

 

10 years

 

Stock Option

 

Brand Strategy Advisor

 

125,000

 

$

0.001

 

09/07/2021

 

I

 

10 years

 

Stock Option

 

IR/PR Agency

 

1,000,000

 

$

0.001

 

01/10/2022

 

J

 

5 years

 

Stock Option

 

Chief Scientific Advisor

 

200,000

 

$

0.001

 

12/28/2021

 

K

 

10 years

 

Stock Option

 

Marketing strategy

 

100,000

 

$

0.001

 

08/01/2022

 

E

 

10 years

 

Stock Option

 

Financial Advisor

 

125,000

 

$

0.001

 

09./01/2022

 

H

 

10 years

 

 

 

Total

 

3,391,250

 

 

 

 

 

 

 

 

 

 

Stock Options and Stock Awards: (continued)

 

A.

The Restricted Stock shall vest over a four (4) year period following the Vesting Start Date with 25% of the Restricted Stock vesting on the one (1) year anniversary of the Vesting Start Date and thereafter will begin vesting on each monthly anniversary of the Vesting Start Date at a rate of 1/36 per month.

B.

The Option Shares shall be fully vested upon the Vesting Start Date; however, the Participant will be unable to exercise the Option Shares for one (1) year from the Vesting Start Date.

C.

The Option Shares shall vest with respect to 100,000 shares upon issuance of the option, with an additional 25,000 shares vesting upon achieving $500,000 D2C revenue, an additional 50,000 shares vesting upon achieving $2,000,000 D2C revenue and an additional 100,000 shares vesting upon achieving $10,000,000 D2C revenue.

D.

The Restricted Stock shall be fully vested upon the Vesting Start Date.

E.

The Option Shares shall vest over a one (1) year period following the Vesting Start Date with 25% of the Option Shares vesting on each three (3) month anniversary of the Vesting Start Date.

F.

The Restricted Stock shall vest over a one (1) year period following the Vesting Start Date with 25% of the Restricted Stock vesting on each three (3) month anniversary of the Vesting Start Date.

G.

The Restricted Stock shall vest over a two (2) year period following the Vesting Start Date with 12.5% of the Restricted Stock vesting on each three (3) month anniversary of the Vesting Start Date.

H.

The Option Shares shall vest over a two (2) year period following the Vesting Start Date with 12.5% of the Option Shares vesting on each three (3) month anniversary of the Vesting Start Date.

I.

The Option Shares shall be fully vested upon the Vesting Start Date and the Participant shall have two (2) years to exercise the Option Shares post termination of Continuous Service.

J.

The Option Shares shall vest with respect to 300,000 shares after one year from the date of the January 10, 2022 start date of the Services Agreement; 100,000 shares of common stock on getting to 100,000 cross-platform followers; 200,000 shares of common stock on sustained market capitalization of $200 million for a month assuming average daily trading volume (ADTV) of 100,000 shares; 200,000 shares of common stock on sustained market capitalization of $400 million for a month assuming ADTV of 100,000 shares; 200,000 shares of common stock on Nasdaq uplisting.

K.

The Option Shares shall vest over a two (2) year period following the Vesting Start Date with 2% of the Option Shares vesting on each six (6) month anniversary of the Vesting Start Date.

 

The following table summarizes the Company’s stock award activities:

 

 

 

Number of shares

 

 

Weighted Average

Grant Date Fair

Value Per Share

 

 

Weighted Average

Remaining

Recognition

Period (Years)

 

Nonvested at June 30, 2021

 

 

-

 

 

$

-

 

 

 

-

 

Granted

 

 

3,100,000

 

 

$

3.75

 

 

 

1.95

 

Vested

 

 

(218,750

)

 

$

3.75

 

 

 

 -

 

Forfeited

 

 

-

 

 

$

-

 

 

 

 -

 

Nonvested at June 30, 2022

 

 

2,881,250

 

 

$

3.75

 

 

 

1.66

 

Granted

 

 

600,000

 

 

$

3.75

 

 

 

4.00

 

Vested

 

 

(583,333)

 

 

$

3.75

 

 

 

-

 

Forfeited

 

 

-

 

 

 

-

 

 

 

-

 

Nonvested at September 30, 2022

 

 

2,897,917

 

 

$

3.75

 

 

 

1.68

 

 

The Company recorded $1,885,381 as stock-based compensation expenses during the fiscal year ended June 30, 2022 and a further $1,033,404 in the three months ended September 30, 2022. Deferred compensation expense associated with unvested stock awards is $10,956,215 as of September 30, 2022. The weighted average period over which these costs are expected to be recognized is approximately 2 years.

 Stock Options and Stock Awards: (continued)

 

The following table summarizes the Company’s stock option activities:

 

 

 

Number

of Shares

 

 

Weighted

Average

Exercise Price

 

 

Weighted

Average

Remaining

Term

in Years

 

 

Aggregate

Intrinsic

Value

 

Outstanding at June 30, 2021

 

 

-

 

 

$-

 

 

 

-

 

 

$-

 

Granted 

 

 

3,166,250

 

 

$0.001

 

 

 

10

 

 

 

-

 

Exercised 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Cancelled 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Outstanding at June 30, 2022

 

 

3,166,250

 

 

$0.001

 

 

 

7.60

 

 

$-

 

Granted 

 

 

225,000

 

 

$0.001

 

 

 

10

 

 

 

-

 

Exercised 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Cancelled 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Options exercisable at September 30, 2022

 

 

685,000

 

 

$0.001

 

 

 

7.52

 

 

$-

 

 

The stock options were valued using Black-Scholes pricing model. The Black-Scholes pricing model applied the following assumptions: risk-free interest rate of 3.26%, expected term of 5 to 10 years, expected volatility of 62.49% and dividend yield of 0%.

 

The Company recorded $3,442,847 as stock-based compensation expenses during the fiscal year ended June 30, 2022 in respect to vested options and a further $795,020 during the three months ended September 30, 2022. Unamortized compensation expense associated with unvested stock options is $8,479,321 as of September 30, 2022. The weighted average period over which these costs are expected to be recognized is approximately 7.5 years.