Annual report pursuant to Section 13 and 15(d)

Stock Options

v3.10.0.1
Stock Options
12 Months Ended
Aug. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock Options
13. Stock Options

 

 

The Company has established its 2007 Equity Incentive Plan, whereby the board of directors may grant up to 2,000,000 stock options to eligible employees and directors, the 2010 Stock Option Plan whereby the board of directors may, from time to time, grant up to 1,980,000 stock options to officers and employees, and its 2014 Stock Option Plan whereby the board of directors may grant up to 3,850,000 stock options to directors, officers, employees, and consultants. Stock options granted must be exercised no later than five years from the date of grant or such lesser period as determined by the Company’s board of directors. The exercise price of an option is equal to or greater than the closing market price of the Company’s common shares on the day preceding the date of grant. The vesting terms of each grant are set by the board of directors.

 

 

 

Fiscal 2018 Activity

 

On December 1, 2017, Lexaria granted 200,000 stock options with an exercise price of $0.83 and an expiration date of December 1, 2022 to an officer of the Company, pursuant to an existing management contract. The options were valued at $140,457 and included in consulting expense.

 

On May 31, 2018, the Company granted stock options to directors, officers, employees and consultants that enable the option holders to purchase up to 1,725,000 common shares of the Company at a price of $1.53 for a period of five years, vesting immediately. The options were valued at $2,266,157 and included in consulting expense.

 

On August 31, 2018, the Company granted 100,000 stock options to Advisors to the Company, valid for five years with an exercise price of $2.06, vesting immediately. The options were valued at $173,428 and included in consulting expense.

 

Fiscal 2017 Activity

 

On October 10, 2016, the Company granted 250,000 stock options to a consultant for business advisory services. The exercise price of the stock options is $0.14 per share, vesting immediately and expiring on October 10, 2018.

 

On June 2, 2017, the Company granted 200,000 stock options to an officer of the Company. The exercise price of the stock options is $0.37 per share, vesting immediately and expiring five years from the date of grant.

 

On June 21, 2017, the Company granted 300,000 stock options to a consultant, 100,000 vesting annually for 3 years, with an exercise price of $0.295 and expiring five years from the date of grant. The company also granted 100,000 options to consultants vesting immediately with an exercise price of $0.295 and expiring five years from the date of grant.

 

During the year ended August 31, 2017, the Company also recorded $113,044 of stock based compensation in Consulting on the Income Statement of which $93,969 pertained to the stock options granted during the period and $19,075 being the recognition of expense from previous grants amortized from prepaid expenses. In 2016 the Company recorded $92,270 of stock based compensation in Consulting and $29,745 in Investor Relations on the Statement of Operations.

  

A continuity schedule for stock options is presented below:

  

 

 

Number of

Options

 

 

Weighted Average Exercise Price

$

 

Balance, August 31, 2016 (vested and outstanding)

 

 

3,485,000

 

 

 

0.15

 

Exercised

 

 

(1,014,125 )

 

 

0.17

 

Granted

 

 

850,000

 

 

 

0.14

 

Balance, August 31, 2017 (outstanding)

 

 

3,320,875

 

 

 

0.15

 

Exercised

 

 

(545,875 )

 

 

0.17

 

Granted

 

 

2,025,000

 

 

 

1.49

 

Balance, August 31, 2018 (outstanding)

 

 

4,800,000

 

 

 

0.71

 

Balance, August 31, 2018 (exercisable)

 

 

4,600,000

 

 

 

0.73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

August 31

2018

 

 

August 31

2017

 

Expected volatility

 

127% - 131%

 

 

98% - 108%

 

Risk-free interest rate

 

2.13% - 2.74%

 

 

0.83% - 1.78%

 

Expected life

 

5 years

 

 

2 - 5 years

 

Dividend yield

 

 

0.00 %

 

 

0.00 %

Estimated fair value per option

 

$0.70 - $1.73

 

 

$0.07 - $0.27

 

 

 

 

 

 

 

 

 

 

A summary of the Company’s vested and outstanding stock options as at August 31, 2018 is presented below:

 

Number of

Stock Options

 

 

Number of Stock

Options Exercisable

 

 

Weighted Average

Remaining Contractual

Life

 

Weighted Average

Exercise Price

$

 

 

Aggregate

Intrinsic Value

$

 

 

990,000

 

 

 

990,000

 

 

1.31 years

 

 

0.10

 

 

 

1,930,500

 

 

275,000

 

 

 

275,000

 

 

1.43 years

 

 

0.09

 

 

 

538,750

 

 

550,000

 

 

 

550,000

 

 

1.57 years

 

 

0.09

 

 

 

1,077,500

 

 

110,000

 

 

 

110,000

 

 

2.05 years

 

 

0.17

 

 

 

206,500

 

 

300,000

 

 

 

300,000

 

 

2.62 years

 

 

0.11

 

 

 

582,000

 

 

200,000

 

 

 

200,000

 

 

3.76 years

 

 

0.37

 

 

 

336,000

 

 

350,000

 

 

 

150,000

 

 

3.81 years

 

 

0.30

 

 

 

614,250

 

 

200,000

 

 

 

200,000

 

 

4.25 years

 

 

0.83

 

 

 

244,000

 

 

1,725,000

 

 

 

1,725,000

 

 

4.75 years

 

 

1.53

 

 

 

897,000

 

 

100,000

 

 

 

100,000

 

 

5.00 years

 

 

2.06

 

 

 

(1,000 )

 

4,800,000

 

 

 

4,600,000

 

 

3.17 years

 

 

0.71

 

 

 

6,425,500