Annual report pursuant to Section 13 and 15(d)

Share Purchase Warrants

v3.21.2
Share Purchase Warrants
12 Months Ended
Aug. 31, 2021
Share Purchase Warrants Disclosure [Abstract]  
SHARE PURCHASE WARRANTS
22. SHARE PURCHASE WARRANTS

 

From September 17, 2019 to August 7, 2020, the Company issued 19,384,900 warrants to convertible debt note holders and subscribers for common shares, in accordance with the terms of subscription unit agreements entered into with the convertible note holders and subscribers. The fair value of the warrants granted was estimated at $918,147 using the relative fair value method. In addition, warrants valued on debt extinguishment agreements entered into with certain convertible note holders, whereby the exercise price and in certain cases, the expiry date of the warrant were amended, amounted to $78,792. 

  

From January 26, 2021 to July 27, 2021, the Company issued a total of 66,496,016 warrants for common shares of which 17,874,966 were issued in terms of subscription agreements entered into with investors and a further 42,835,635 warrants issued in terms of convertible debt subscriptions and 5,785,415 brokers warrants issued in terms of the subscription agreements mentioned above.

 

The share purchase warrants issued, during the year ended August 31, 2021, were valued at $3,835,673 using the relative fair value method. The fair value of share purchase warrants was estimated using the Black-Scholes valuation model utilizing the following weighted average assumptions:

 

    Year ended
August 31,
2021
 
Exercise price   $ 0.0475 to 0.12  
Expected share price volatility     135.5 to 181.4 %
Risk-free interest rate     0.14 to 0.84 %
Expected term     0.6 to 4.45  

  

Warrants exercisable for 26,999,167 common shares at exercise prices ranging from $0.18 to $3.427 and warrants exercisable over 9,776,815 common shares at exercise prices ranging from $0.22 and $21.53 per share expired during the year ended August 31, 2021 and 2020, respectively.

 

Warrants for 14,690,739 common shares were exercised for gross proceeds of $635,706 for the year ended August 31, 2021.

 

During August 2021 the company received $750,000 from a private investor in terms of an irrevocable subscription agreement for the issue of 6,250,000 units, at an issue price of $0.12 per unit. Each unit consists of one common share and one transferable share purchase warrant exercisable at $0.12 per share, for a period of twenty four months from closing. Due to the suspension of trading by the TSXV, these warrants have not been issued as yet.

 

A summary of the Company’s warrant activity during the period September 1, 2019 and August 31, 2021 is as follows:

 

    Year ended
August 31,  2021
  Year ended
August 31, 2020
    Number of Options   Weighted average
exercise price
  Number of options   Weighted average
exercise price
Balance, beginning of period     48,342,714     $ 0.4254       38,734,629     $ 0.7119  
Warrants granted     66,496,016       0.1021       19,384,900       0.0824  
Warrants exercised     (14,690,739 )     0.0433      
-
     
-
 
Warrants forfeited     (26,999,167 )     0.7042       (9,776,815 )     0.8675  
Balance, end of period     73,148,824     $ 0.1053       48,342,714     $ 0.4254  

  

The following table summarizes information about warrants outstanding as of August 31, 2021:

 

    Warrants outstanding and exercisable
Exercise price   Number of shares   Weighted average
remaining years
$ 0.0550       8,582,500       2.44  
$ 0.0562       12,846,973       3.33  
$ 0.0800       392,500       2.58  
$ 0.1000       276,512       1.41  
$ 0.1200       47,827,077       3.52  
$ 0.1400       151,785       3.39  
$ 0.1700       293,700       2.25  
$ 0.2300       2,777,777       0.08  
$ 0.1053       73,148,824       3.21