Common Shares and Warrants |
13. |
Common Shares and Warrants |
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Fiscal 2019 Activity
During the year ended August 31, 2019 the Company closed a non-brokered private placement for 947,150 Units priced at $1.60 each. Each Unit consists of one common share and one Share purchase warrant. Each warrant shall entitle the holder to acquire one common share at a price of $2.25 per Share for a period of 24 months. The Company also issued 28,175 broker warrants. The broker warrants have a term of 24 months and are each exercisable into one common share of the Company at a price of $2.25. The fair value of these broker warrants was determined to be $16,095, which were recorded as a share issue cost within additional paid in capital for a net effect of $Nil.
The company granted a total of 107,737 broker warrants with a value of $6,484 that were recorded as a share issue cost within additional paid in capital for a net effect of $Nil.
The company granted a total of 100,00 warrants pursuant to an agreement with a vendor valued at $52,817 that were recorded as an expense within investor relations.
During the year ended August 31, 2018 the Company recognized $51,448 in consulting expense for warrants previously granted to a consultant upon vesting.
Fiscal 2018 Activity
On October 27, 2017 the Company extended the expiration date of warrants originally issued on January 9, 2017, with a one-year expiration date. The warrant quantity and exercise price remain unchanged, 500,000 warrants exercisable at $0.44, will now expire on January 9, 2019. There was a $Nil effect on the modification of the warrants.
During the year ended August 31, 2018 the Company granted a total of 1,000,000 warrants with a fair value of $1,011,822 pursuant to consulting agreements signed during the year. The value of the warrants was recorded in consulting fees on the statement of operations. The company also granted a total of 35,913 warrants with a value of $21,646 which were recorded as a share issue cost within additional paid in capital for a net effect of $Nil.
During the year ended August 31, 2018 the Company recognized $51,448 in consulting expense for warrants previously granted to a consultant upon vesting.
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A summary of share issuance is presented relating to option and warrant exercises, agreement requirements and debt settlement is presented below: |
Type of Issuance
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Number
of Shares
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Total
Value
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Warrant exercise(1)
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1,626,513 |
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796,122 |
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Option exercise
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430,000 |
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66,250 |
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Private placement
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947,150 |
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1,515,440 |
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Per agreements(2)
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250,000 |
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234,500 |
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3,253,663 |
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$ |
2,612,312 |
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(1) Includes 384,212 broker warrants exercised for gross proceeds of $191,742 |
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(2) The Company awarded the restricted common shares as required by consulting contracts |
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A continuity schedule for warrants is presented below: |
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Number of Warrants
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Weighted
Average
Exercise
Price $
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Balance August 31, 2017
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8,844,506 |
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0.29 |
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Cancelled/Expired
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(230,000 |
) |
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0.17 |
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Exercised
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(6,364,145 |
) |
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0.28 |
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Issued
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1,035,913 |
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1.48 |
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Balance August 31, 2018
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3,286,274 |
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0.72 |
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Cancelled/Expired
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(17,498 |
) |
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0.59 |
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Exercised
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(1,626,513 |
) |
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0.49 |
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Issued
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1,183,062 |
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1.99 |
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Balance August 31, 2019
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2,825,325 |
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1.38 |
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The fair value of share purchase warrants granted as broker warrants, compensation units, and compensatory warrants, 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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August 31
2019
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August 31
2018
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Expected volatility
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1% – 117%
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100% – 154%
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Risk-free interest rate
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2.31% – 2.87%
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1.21% – 2.60%
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Expected life
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1 day – 2 years
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1.21 – 3 years
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Dividend yield
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0.00%
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0.00%
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Estimated fair value per warrant
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$Nil – $0.57
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$0.40 – $1.48
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A summary of warrants outstanding as of August 31, 2019 is presented below: |
# of Warrants
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Weighted Average Remaining
Contractual Life
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Weighted Average
Exercise Price $
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250,000
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0.25 years
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0.83
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500,000
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0.38 years
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1.83
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975,325
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1.17 years
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2.25
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100,000
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1.73 years
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0.96
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250,000
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1.73 years
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1.55
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750,000
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2.11 years
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0.14
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2,825,325
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1.27 years
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1.38
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