| Common Shares and Warrants [Text Block] |
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12.
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Common Shares and Warrants
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Fiscal 2017 Activity
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On October 11, 2016, pursuant to its agreement with Docherty Management Ltd. (Note 17), the Company issued
252,000
restricted common shares with a value of $35,760.
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On October 11, 2016, pursuant to the Advisory Agreement, the Company issued
750,000
warrants with an exercise price of $0.14
per share and term of five years, in return for consulting services provided in August, September, and October. The Company recognized the fair value of $32,252
from
250,000
of such warrants for services received during the month of August 2016, during the year ended August 31, 2016, and during the three months ended November 30, 2016, further recognized $59,490
for the remaining
500,000
warrants issued in return for consulting services received during the months of September and October 2016.
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The Company reached an agreement with a director to settle the outstanding amount pursuant to a marketing agreement (Note 17), through issuance of common shares of the Company. To settle the outstanding amount of $16,000
for four months to October 31, 2016, the Company issued
114,286
shares of its common stock at a value of $0.14
per share, on October 11, 2016. On February 17, 2017, the Company issued a further
29,091
common shares to settle $16,000
of fees incurred during the four months ended February 28, 2017. A total of $8,000
of the $32,000
was recognized as consulting fees during the year ended August 31, 2016.
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On October 27, 2016, the Company issued
56,250
shares of its common stock in settlement of $9,000, recognized within accounts payable and accrued liabilities as at August 31, 2016.
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On November 1, 2016, the Company issued
500,000
warrants to a consultant. Each warrant entitles the consultant to purchase one common share of the Company at a price of $0.31
per share with a term expiring on May 31, 2017. The Company recognized $48,313, representing the fair value of such warrants, during the six months ended February 28, 2017.
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During November, 2016, the Company provided to its warrant holders, an incentive for early exercise of their previously held warrants. Upon exercise of each warrant, in addition to the common shares of the Company, the warrant holders received a second warrant with identical terms to purchase one additional common share of the Company. The Company raised $737,508
from this early exercise warrant incentive program. A total of
3,245,000
warrants were exercised at a weighted average exercise price of $0.23
and the Company issued
3,245,000
common shares as well as
3,245,000
additional warrants to purchase common shares with an exercise price of $0.23
per share, expiring on May 14, 2017. The fair value of these additional warrants was determined to be $298,777.
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On January 10, 2017, the Company issued
500,000
warrants to a consultant. Each warrant entitles the consultant to purchase one common share of the Company at a price of $0.44
per share with a term expiring on January 9, 2018. The Company recognized $112,725, representing the fair value of such warrants, during the six months ended February 28, 2017.
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During the six months ended February 28, 2017, a total of
888,500
incentive stock options were exercised for proceeds of $148,709. A further
419,875
warrants were also exercised for proceeds of $67,278.
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As at February 28, 2017, Lexaria had
56,293,479
shares issued and outstanding and
13,427,866
warrants issued and outstanding.
A continuity schedule for warrants is presented below:
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Weighted Average |
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Number of |
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Exercise Price |
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Warrants |
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$ |
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Balance, August 31, 2015 |
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19,840,186
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0.23
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Expired |
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(13,978,286
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0.22
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Issued |
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6,274,341
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0.15
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Balance, August 31, 2016 |
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12,136,241
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0.18
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Cancelled |
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(38,500
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0.18
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Exercised |
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(3,664,875
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0.23
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Issued |
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4,995,000
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0.24
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Balance, February 28, 2017 |
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13,427,866
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0.19
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The fair value of warrants granted was estimated as of the date of the grant by using the Black-Scholes option pricing model with the following assumptions:
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February 28 |
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2017 |
| Expected volatility |
137% –
138%
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| Risk-free interest rate |
0.65% –
0.82%
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| Expected life |
0.46
–
1.00
years
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| Dividend yield |
0.00%
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| Estimated fair value per warrant |
$0.09
- $0.23
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A summary of warrants outstanding as of February 28, 2017 is presented below:
| # of Warrants |
Weighted |
Weighted |
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Average |
Average |
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Remaining |
Exercise Price |
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Contractual Life |
$ |
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5,417,500
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0.21
years
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0.23
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323,400
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0.21
years
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0.18
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500,000
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0.25
years
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0.31
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629,375
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0.55
years
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0.15
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290,400
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0.78
years
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0.27
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500,000
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0.86
years
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0.23
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1,558,525
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1.45
years
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0.14
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3,108,666
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1.50
years
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0.14
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350,000
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2.26
years
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0.14
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750,000
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4.62
years
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0.14
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13,427,866
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1.00
year(s)
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0.19
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