Annual report pursuant to Section 13 and 15(d)

Common Shares and Warrants

v3.19.3
Common Shares and Warrants
12 Months Ended
Aug. 31, 2019
Equity [Abstract]  
Common Shares and Warrants
13. Common Shares and Warrants

 

 

 

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.

 
A summary of share issuance is presented relating to option and warrant exercises, agreement requirements and debt settlement is presented below:

 

Type of Issuance

 

Number

of Shares

 

 

Total

Value

 

Warrant exercise(1)

 

 

1,626,513

 

 

 

796,122

 

Option exercise

 

 

430,000

 

 

 

66,250

 

Private placement

 

 

947,150

 

 

 

1,515,440

 

Per agreements(2)

 

 

250,000

 

 

 

234,500

 

 

 

 

3,253,663

 

 

$ 2,612,312

 

 

(1) Includes 384,212 broker warrants exercised for gross proceeds of $191,742

 

(2) The Company awarded the restricted common shares as required by consulting contracts

 

A continuity schedule for warrants is presented below:

 

 

 

Number of Warrants

 

 

Weighted

Average

Exercise

Price $

 

Balance August 31, 2017

 

 

8,844,506

 

 

 

0.29

 

Cancelled/Expired

 

 

(230,000 )

 

 

0.17

 

Exercised

 

 

(6,364,145 )

 

 

0.28

 

Issued

 

 

1,035,913

 

 

 

1.48

 

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

 

 

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:

 

 

 

August 31

2019

 

August 31

2018

Expected volatility

 

1% – 117%

 

100% – 154%

Risk-free interest rate

 

2.31% – 2.87%

 

1.21% – 2.60%

Expected life

 

1 day – 2 years

 

1.21 – 3 years

Dividend yield

 

0.00%

 

0.00%

Estimated fair value per warrant

 

$Nil – $0.57

 

$0.40 – $1.48

 

A summary of warrants outstanding as of August 31, 2019 is presented below:

 

# of Warrants

 

 

Weighted Average Remaining

Contractual Life

 

Weighted Average

Exercise Price $

 

 

250,000

 

 

0.25 years

 

 

0.83

 

 

500,000

 

 

0.38 years

 

 

1.83

 

 

975,325

 

 

1.17 years

 

 

2.25

 

 

100,000

 

 

1.73 years

 

 

0.96

 

 

250,000

 

 

1.73 years

 

 

1.55

 

 

750,000

 

 

2.11 years

 

 

0.14

 

 

2,825,325

 

 

1.27 years

 

 

1.38