NOTE 13 – STOCKHOLDERS’ DEFICIT

Common Stock

On February 28, 2025 and February 29, 2024, the Company had 150,000,000 shares of $0.0001 par value common stock authorized for issuance.

During the year ended February 28, 2025, the Company issued 13,501,563 shares of common stock for approximately $3,453 in cash. As part of the offering, the Company also granted certain investors warrants to purchase 3,000,000 shares of common stock. The warrants are fully vested, exercisable at $1.00 per share, and will expire in 3 years.

During the year ended February 29, 2024, the Company issued 9,918,302 shares of common stock for net proceeds of approximately $2,943 in cash and services. In addition, the Company also issued 25,000 shares of common stock for services rendered with a fair value of $6.

On February 28, 2025, there were insufficient authorized and unissued shares for the Company to satisfy all of its commitments to deliver shares. The Company’s sequencing policy resulted in the allocation of authorized and unissued shares in the following order at February 28, 2025 (i) Warrants, and (ii) Convertible Notes Payable and Convertible Notes Payable-Related Party. The sequence is based upon reclassifying securities with the earliest maturity date first. This sequencing and the lack of sufficient authorized shares resulted in the Company recording the conversion option of the convertible note payable-Kopple as a derivative liability (see Note 12).

Stock Options

In October 2011, the Company’s shareholders approved the 2011 Director and Executive Officers Stock Option Plan (the “2011 Plan”). Under the 2011 Plan, the Company may grant options, or warrants, for up to 15% of the number of shares of Common Stock of the Company outstanding from time to time. Pursuant to this plan, the Board or a committee of the Board may grant an option to any person who is elected or appointed a director or executive officer of the Company. The exercise price of each option shall be at least equal to the fair market value of such shares on the date of grant, and the term of the options may not be greater than five years. A summary of the Company’s stock option activity is as follows:

During the year ended February 28, 2025, the Company’s Board of Directors approved options exercisable into 4,000,000 shares to be issued pursuant to the Company’s 2011 Plan. 3,000,000 options were issued to Board members, and 1,000,000 options were issued to an employee, with immediate vesting.

The stock options are exercisable at a price of $0.50 per share and expire in ten years. The total fair value of these options at grant date was approximately $1,601, which was determined using a Black-Scholes option pricing model with the following average assumption: stock price of $0.42 share, expected term of five years, volatility of 182%, dividend rate of 0%, and weighted average risk-free interest rate of 4.52%. The expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s common stock; the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future; and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award.

As of February 28, 2025, the intrinsic value as these stock options amounted to $205. The exercise prices and information related to options under the 2011 Plan outstanding on February 28, 2025, are as follows:

Warrants

There was no intrinsic value as of February 28, 2025, as the exercise prices of these warrants were greater than the market price of the Company’s stock. The exercise prices and information related to the warrants as February 28, 2025, are as follows: