Quarterly report pursuant to Section 13 or 15(d)

Common Shares and Warrants

v3.23.4
Common Shares and Warrants
 3 Months Ended
Nov. 30, 2023
Common Shares and Warrants  
Common Shares and Warrants

11. Common Shares and Warrants

 

During the quarter ended November 30, 2023, the Company completed the following issuances of common shares and warrants:

 

1.

On October 3, 2023, the Company entered into a securities purchase agreement with a single healthcare-focused institutional investor to purchase 889,272 shares of common stock and 729,058 pre-funded warrants in a registered direct offering. In a concurrent private placement, the Company also sold to the investor, warrants to purchase up to 1,618,330 shares of common stock. The combined effective offering price for each share of common stock (or pre-funded warrant in lieu thereof) and accompanying warrant was $0.97 (to note the pre-funded warrants were issued at a price of $0.9699 and have an exercise price of $0.0001). The warrants will become exercisable six months from issuance, expire five and a half years from the issuance date, and have an exercise price of $0.97 per share.

 

 

 

The net proceeds to the Company from the registered direct offering and concurrent private placement were $1.25 million, after deducting placement agent fees and other estimated offering expenses payable by the Company.

 

 

 

 To date all of the pre-funded warrants have been exercised, resulting in an issuance by the Company of an aggregate 729,058 common shares for gross proceeds of approx. 73 dollars.

 

 

2.

The Company issued an aggregate 601,661 common shares pursuant to the exercise of warrants that were issued under our May 11, 2023, financing, at an exercise price of $0.95 per share for gross proceeds of $571,578 of which $33,250 was being held in Lexaria’s trust account with the warrant agent at November 30, 2023.

 

A continuity schedule for warrants for the three months ended November 30, 2023, is presented below:

 

 

 

Number of Warrants

 

 

Weighted Average Exercise Price $

 

Balance, August 31, 2023

 

 

 4,520,483

 

 

 

4.71

 

Issued

 

 

 2,347,388

 

 

 

 0.65

 

Exercised

 

 

 (1,330,719 )

 

 

 0.43

 

Balance, November 30, 2023

 

 

 5,537,152

 

 

 

 4.02

 

 

A summary of warrants outstanding as of November 30, 2023, is presented below:

 

Number of Warrants

 

 

Weighted Average Exercise Price

 

Weighted Average Remaining Contractual Life (years)

 

 

60,798

 

 

 $ 36.00

 

 

.96-1.00

 

 

317,190

 

 

 $ 10.50

 

 

1.43-1.45

 

 

116,667

 

 

 $ 9.00

 

 

.37-1.29

 

 

200,000

 

 

 $ 7.00

 

 

0.38

 

 

1,719,828

 

 

 $ 6.58

 

 

2.13

 

 

1,504,339

 

 

 $ 0.95

 

 

4.45

 

 

1,618,330

 

 

 $ 0.97

 

 

5.34

 

 

5,537,152

 

 

 $ 3.55

 

 

4.02

 

Stock Options

 

The Company has established an Equity Incentive Plan which was most recently amended by the Company’s shareholders on May 9, 2023. Pursuant to the amendments, the Equity Incentive Plan now has an evergreen formula, whereby on January 1 each year commencing January 1, 2024, the number of shares issuable pursuant to the Equity Incentive Plan may be increased to a number equal to up to 10% of the issued share capital on December 31 of the previous year. The Company is currently in the process of preparing its S-8 Registration Statement to register an additional 527,111 common shares issuable pursuant to the Equity Incentive Plan, for an aggregate 1,037,544 common shares issuable under the Equity Incentive Plan. Stock options currently granted must be exercised within five years from the date of grant or such lesser period as determined by the Company’s board of directors. The vesting terms of each grant are also set by the 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.

  

A continuity schedule for stock options is presented below:

 

 

 

Options

 

 

Weighted Average Exercise Price

 

 

Weighted Average Remaining Contractual Term (years)

 

 

Aggregate Intrinsic Value

 

Balance August 31, 2022

 

 

 424,836

 

 

 $ 6.45

 

 

 

 

 

 

 

Cancelled/expired

 

 

 (47,500 )

 

 $ 2.98

 

 

 

 

 

 

 

Granted

 

 

 69,600

 

 

 $ 1.75

 

 

 

 

 

 

 

Balance August 31, 2023

 

 

 446,936

 

 

 $ 3.32

 

 

 

 

 

 

 

Cancelled/expired

 

 

 (46,000 )

 

 $ 2.98

 

 

 

 

 

 

 

Granted

 

 

 85,000

 

 

 $ 1.15

 

 

 

 

 

 

 

Balance November 30, 2023 (outstanding)

 

 

 485,936

 

 

 $ 2.98

 

 

 

 3.36

 

 

 $ 46,025

 

Balance November 30, 2023 (exercisable)

 

 

 474,186

 

 

 $ 2.97

 

 

 

 3.37

 

 

 $ 46,025

 

 

On October 26, 2023, the Company granted 85,000 options to its officers and employees with an exercise price of $1.15 and a term of 5 years.

The fair value of stock options granted in the three-months ended November 30, 2023, were estimated as of the date of the grant by using the Black-Scholes option pricing model with the following assumptions:

 

 

 

 November 30, 2023

 

Expected volatility

 

 

 92 %

Risk-free interest rate

 

 

 5.03 %

Expected life

 

 

 2.50

 

Dividend yield

 

 

 0.00 %

Estimated fair value per option

 

 $ 0.64

 

 

Stock-based compensation expense for the three-month periods ended November 30, 2023, and November 30, 2022, totaled $53,953 and $68,776, respectively. The expense for the three months ended November 30, 2023, relates entirely to options awarded during the quarter.

 

As of November 30, 2023, the total unrecognized non-cash compensation costs are $39,117 related to 11,750 non-vested stock options with a $3.27 weighted average price. These costs are expected to be recognized over a weighted average period of 0.32 years.  All non-vested options are attributable to employees.