| 14. Common Shares and Warrants |
14. |
Common Shares and Warrants |
|
|
|
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. This mathematical model for determining the value of derivatives was developed in 1973 and assumes a constant volatility skew. The value assigned to the warrants issued during the period reflects an anomaly inherent in this model.
During the quarter ended May 31, 2021, the Company issued the following warrants summarized below:
|
Type of Issuance |
|
Number of
Shares
|
|
|
Exercise
Price
|
|
|
Total Value |
|
Warrants |
|
|
300,000 |
|
|
|
$9.00 |
|
|
$ |
785,895 |
|
|
|
|
300,000 |
|
|
|
|
|
|
$ |
785,895 |
|
|
A continuity schedule for warrants is presented below: |
|
|
Number of Warrants |
|
|
Weighted Average Exercise Price $ |
|
Balance August 31, 2019 |
|
|
94,177 |
|
|
|
41.40 |
|
Cancelled/expired |
|
|
(25,000 |
) |
|
|
44.90 |
|
Issued |
|
|
402,431 |
|
|
|
12.74 |
|
Balance August 31, 2020 |
|
|
471,608 |
|
|
|
16.77 |
|
Cancelled/expired |
|
|
(44,161 |
) |
|
|
67.50 |
|
Issued |
|
|
2,630,017 |
|
|
|
6.58 |
|
Balance May 31, 2021 |
|
|
3,057,464 |
|
|
|
7.87 |
|
|
A summary of warrants outstanding as of May 31, 2021, is presented below: |
# of Warrants |
|
|
Weighted Average
Remaining Contractual Life
|
|
Weighted Average
Exercise Price $
|
|
|
25,000 |
|
|
0.36 years |
|
|
4.20 |
|
|
292 |
|
|
0.45 years |
|
|
36.00 |
|
|
7,500 |
|
|
1.43 years |
|
|
24.00 |
|
|
300,000 |
|
|
2.88 years |
|
|
9.00 |
|
|
51,814 |
|
|
3.46 years |
|
|
36.00 |
|
|
8,984 |
|
|
3.50 years |
|
|
36.00 |
|
|
16,667 |
|
|
3.79 years |
|
|
9.00 |
|
|
317,190 |
|
|
3.93 years |
|
|
10.50 |
|
|
2,330,017 |
|
|
4.63 years |
|
|
6.58 |
|
|
3,057,464 |
|
|
4.32 years |
|
|
7.85 |
|
|
The fair value of purchase warrants was estimated using the following assumptions: |
|
|
May 31
2021
|
|
|
|
|
|
Expected volatility |
|
|
103 |
% |
Risk-free interest rate |
|
|
0.16 |
% |
Expected life |
|
3 years |
|
Dividend yield |
|
|
0 |
% |
Estimated fair value per warrant |
|
$ |
2.62 |
|
|