Lexaria Bioscience Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Common Shares and Warrants

Common Shares and Warrants

9 Months Ended

May 31, 2020

12. Common Shares and Warrants

During the quarter ended May 31, 2020 the Company issued an aggregate of 8,866,211 units at $0.23, issued in two tranches for gross proceeds of $2,039,229. Each unit consists of one common share and one full warrant. The warrants are exercisable on issuance at an exercise price of $0.35 with 8,028,254 expiring May 6, 2025 and 837,957 on May 11, 2025. Pursuant to the agent agreement $151,623 and 649,123 broker warrants with an exercise price of $0.35 expiring May 6, 2025, were paid. The warrants were valued at $128,329 and were recorded as a share issue cost within additional paid in capital for a net effect of $Nil.

A year to date summary of share issuances is presented below:

Type of Issuance	Number of		Total
	Shares		Value $
Option exercise	110,000		11,000
Private placement⁽¹⁾	10,689,956		2,859,914
	10,799,956	$	2,870,914

⁽¹⁾ Total fees of $156,288 were paid for total net receipt of $2,703,626.

A continuity schedule for warrants is presented below:

	Number of Warrants			Weighted Average Exercise Price $
Balance August 31, 2018		3,286,274			0.72
Cancelled/expired		(17,498	)		0.59
Exercised		(1,626,513	)		0.49
Issued		1,183,062			1.99
Balance August 31, 2019		2,825,325			1.38
Cancelled/expired		(750,000	)		1.50
Issued		12,072,829			0.42
Balance May 31, 2020		14,148,154			0.56

The fair value of share purchase warrants granted was estimated as of the date of the grant by using the Black-Scholes option pricing model with the following assumptions:

	May 31 2020
Expected volatility		91% - 94%
Risk-free interest rate		0.36% - 2.87%
Expected life		2 - 5 years
Dividend yield		0%
Estimated fair value per warrant		0.28 - 0.54

A summary of warrants outstanding as of May 31, 2020 is presented below:

# of Warrants	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price $
975,325	0.42 years		2.25
100,000	0.98 years		0.96
250,000	0.98 years		1.55
750,000	1.36 years		0.14
225,000	2.43 years		0.80
1,562,995	1.45 years		0.80
269,500	1.50 years		0.80
500,000	4.79 years		0.30
8,028,254	4.93 years		0.35
1,487,080	4.95 years		0.35
14,148,154	3.84 years		0.56