Lexaria Bioscience Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Common Shares and Warrants

Common Shares and Warrants

9 Months Ended

May 31, 2019

Equity [Abstract]

Common Shares and Warrants

12. Common Shares and Warrants

Fiscal 2019 Activity

On October 31, 2018, the Company closed a non-brokered private placement for gross proceeds of $1,515,440 (the “Offering”). The Offering consisted of 947,150 units (each, a “Unit”) at an issue price of $1.60 per Unit. Each Unit consists of one common share of the Company (a “Share”) and one common share purchase warrant (each, a “Warrant”). Each Warrant entitles the holder to acquire one common share of the Company at a price of $2.25 per common share for a period of 24 months following the closing of the Offering. Finder’s fees of $45,130 and 28,175 finder’s warrants were paid on a portion of the proceeds raised, with each finder’s warrant having exercise terms identical to the Warrants issued. The Warrants were valued at $16,095, which were recorded as a share issue cost within additional paid in capital for a net effect of $Nil.

Type of Issuance	Number of Shares		Total Value
Warrant Exercise⁽¹⁾		1,426,513	$	737,122
Option Exercise		430,000		66,250
Private Placement		947,150		1,515,440
Per Agreement⁽²⁾		100,000		131,000
		2,903,663	$	2,449,812

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⁽¹⁾ Includes 384,212 broker warrants exercised for gross proceeds of $144,799

⁽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		(1,426,513	)		0.52
Issued		1,183,062			1.98
Balance, May 31, 2019		3,025,325			1.31

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

	May 31 2019
Expected volatility		104% - 117%
Risk-free interest rate		2.31% - 2.87%
Expected life		2.00 years
Dividend yield		0.00%
Estimated fair value per warrant		$0.52 - $0.57

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

# of Warrants	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price $
200,000	0.05 years		0.295
250,000	0.50 years		0.83
500,000	0.63 years		1.83
975,325	1.42 years		2.25
100,000	1.98 years		0.96
250,000	1.99 years		1.55
750,000	2.36 years		0.14
3,025,325	1.42 years		1.31