STOCKHOLDERS' EQUITY

6 Months Ended

Jan. 31, 2020

Common stock

The Company is authorized to issue 3,000,000,000 shares of its common stock. All shares of common stock are equal to each other with respect to voting, liquidation, dividend, and other rights. Owners of shares are entitled to one vote for each share owned at any Shareholders’ meeting. The common stock of the Company does not have cumulative voting rights, which means that the holders of more than fifty percent (50%) of the shares voting in an election of directors may elect all of the directors if they choose to do so.

Preferred stock

The Company is authorized to issue 10,000,000 shares of its preferred stock, $.001 par value per share.

Series A convertible preferred stock:

As of January 31, 2020 and July 31, 2019, the Company has no shares of Series A preferred stock outstanding.

Effective April 1, 2019, the Company redeemed all of the issued and outstanding shares of its Series A preferred stock. The holder of 100% of the Series A was Jed Miesner, a member of the Company’s Board of Directors. The Company redeemed 9,000 shares of the Series A, which had the voting power equivalent to 90,000,000 shares of the Company’s common stock, for the consideration of $100.00 per share, or a total payment of $900,000. The redemption price was effectuated through an increase in the principal balance of a promissory note issued to Mr. Miesner by the Company’s wholly owned subsidiary Amazing Energy, LLC. The principal balance of the Note was increased from $1,940,000 to $2,840,000.

Series B convertible preferred stock:

The Company has 50,000 shares of Series B preferred stock outstanding at January 31, 2020. These Series B shares were issued from the designated 10,000,000 shares of preferred stock, $.001 par value, with the following rights and preferences:

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Liquidation preference: Upon a liquidation event, an amount in cash equal to $100 per share, for a total of $5,000,000 computed as of January 31, 2020, shall be paid prior to liquidation payments to holders of Company securities junior to the Series B preferred stock.

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Dividends: Holders of the Series B preferred stock are not entitled to receive a dividend.

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Voting: The Series B preferred stock has no voting rights other than to be voted when required by the laws of the State of Nevada.

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Non-transferrable: The shares of Series B preferred stock are not transferable except under a plan for wealth transfer and estate planning or upon conversion or redemption as set forth below.

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Conversion: Beginning July 31, 2024 (as amended), any shares of the Series B preferred stock outstanding will be convertible, at the discretion of the shareholder, for a period of three years, into common stock purchase warrants of the Company with an conversion price of $1.00 per share on the basis of 110 shares of common stock for each one share of Series “B” preferred stock outstanding.

As additional consideration for a new promissory note dated October 22, 2018 (see Note 8), the terms of the right to convert preferred shares into warrants to acquire common stock attached to the Company’s Series “B” Preferred Stock, were amended to extend the conversion period to April 1, 2024 and to reduce the underlying warrant exercise price from $0.60 per share to $0.40 per share. The Company further agreed to suspend its right to call the Series “B” Preferred Stock until April 1, 2024.

Common Stock:

During the six months ended January 31, 2020 and 2019, the Company issued the following:

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600,000 and 400,000 shares of common stock, respectively, for cash of $150,000 and $100,000.

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1,200,000 and -0- shares of common stock with a value of $330,000 for common stock payable at July 31, 2019.

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700,000 and 1,005,000 shares of common stock with total fair values of $82,000 and $239,071, respectively, as compensation for services.

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-0- and 630,000 shares of common stock with total fair values of $-0- and $126,400, respectively, for common stock issued in connection with offering for working interest.

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1,125,000 and -0- shares of common stock with total fair values of $117,500 and $-0- for financing costs related to the issuance of convertible notes payable (Note 8).

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5,625,000 and -0- shares of common stock issued in connection with convertible notes payable (Note 8). These shares were issued in conjunction with certain convertible notes entered into by the Company (Note 8). These shares were to be returned and retired if the Company paid the notes in full by or before their respective maturity dates. Because the notes were not repaid by their respective maturity dates (see Note 12 Subsequent Events), the lenders are entitled to retain these shares.

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50,000 and 66,000 shares of common stock with total fair values of $12,500 and $16,482, respectively, in settlement of accounts payable.

Warrants:

During the six months ended January 31 2020, the Company issued 300,000 warrants to purchase common stock and recognized compensation of $92,975 for the vesting of warrants issued currently and in prior periods.

During the six months ended January 31, 2019, the Company issued 419,525 warrants to purchase common stock valued at $328,648 for professional services. Additionally, during the six months ended January, 31, 2019, the Company issued 2,400,000 warrants to purchase common stock in connection with promissory notes with a fair value of $288,000 and changed the terms of 2,674,576 existing warrants with an incremental fair value due to the modification of $480,771. See Note 8.

Warrant transactions for the six months ended January 31, 2020 and 2019 are summarized as follows:

	Six Months Ended January 31,
	2020		2019

Outstanding warrants - beginning of period		10,651,308		6,280,633
Issued		300,000		2,819,525
Exercised		-		-
Expired		-		-

Outstanding warrants - end of period		10,951,308		9,100,158

The Company’s outstanding warrants at January 31, 2020 are as follows:

Expiration Year	of Warrants		Exercise Price

2020		1,200,000	$0.50
2021		1,858,332	$0.40 to $1.00
2022		785,200	$0.25 to $0.60
2023		721,625	$0.23 to $0.74
2024		6,386,151	$0.12 to $0.40

		10,951,308

Stock Options:

For the six months ended January 31, 2020 and 2019, the Company recognized stock based compensation of $486,793 and $775,070, respectively, related to vesting of options granted in prior periods.

During the six months ended January 31, 2020, the Company did not grant any stock options.

On October 23, 2018, the Board of Directors authorized the grant of 1,000,000 options to purchase shares of common stock of the Company to its Chief Financial Officer. The options have an exercise price of $0.30 and expire five years from the date of grant. 100,000 of the options vested immediately on the grant date and the remainder were to vest 25% annually upon each anniversary of the grant date. For the six months ended January 31, 2019, the Company recognized stock based compensation of $44,178 for these options. Effective January 31, 2020 the employment agreement was terminated in connection with a Separation Agreement and 600,000 unvested options as of that date were forfeited.

On October 10, 2018, the Board of Directors also authorized the grant of 1,000,000 options to purchase shares of common stock of the Company to certain directors. The options vested immediately at the date of grant. These options have an exercise price of $0.30 and expire on October 23, 2023. The fair value of the grant was $214,726 which the Company recognized as stock-based compensation for the three month period ended October 31, 2018.

At January 31, 2020, unrecognized compensation related to all option grants is $928,679 which will be recognized over the next 2.25 years.

The following is a summary of the Company’s option activity for the six months ended January 31, 2020 and 2019:

	For the six months ended January 31
	2020					2019
				Weighted				Weighted
				Average				Average
				Exercise				Exercise
	Options			Price		Options		Price

Outstanding options - beginning of period		32,085,000		$	0.31		28,085,000	$	0.31
Granted		-					3,500,000
Exercised		-					-
Forfeited or rescinded		(600,000	)				-
Outstanding options - end of period		31,485,000		$	0.31		31,585,000	$	0.31

Outstanding at the end of the period, vested		11,895,833		$	0.31		9,475,000	$	0.31

The Company’s outstanding options at January 31, 2020 are as follows:

	Number
Expiration Year	of Options		Exercise Price

2021		2,600,000	$0.30 to $0.40
2022		27,885,000	$0.25 to $0.40
2023		1,000,000	$0.30
		31,485,000

At January 31, 2020, the vested options had no intrinsic value.

Amazing Energy Oil & Gas, Co. 10-Q/A