Warrants reserve

12 Months Ended

Aug. 31, 2022

Warrants Reserve

Warrants reserve

17. Warrants reserve

Warrant issuances:

Activity during the year ended August 31, 2022:

During the year ended August 31, 2022, the Company issued 17,948,718 five-year warrants pursuant to the registered direct offering described in Note 12 and 628,205 five-year warrants issued to the placement agent, with an exercise price of $0.44. The 17,948,718 five-year warrants were ascribed a fair value of $2.67 million which was valued using the Black-Scholes pricing model with the following assumptions: dividend yield 0%; risk free interest 1.65%; volatility 52% and an expected life of 60 months. The warrants were recognized as a derivative warrant liability on the consolidated statement of financial position.

The 628,205 five-year warrants issued to the placement agent were ascribed a fair value of $0.09 million which was valued using the Black-Scholes pricing model with the following assumptions: dividend yield 0%; risk free interest 1.65%; volatility 52% and an expected life of 60 months. The warrants were recognized under warrants reserve on the consolidated statement of financial position.

Activity during the year ended August 31, 2021:

During the year ended August 31, 2021, the Company issued 2,777,268 three-year warrants with an exercise price of $1.50 as well as 16,461,539 five-year warrants with an exercise price of $0.80 pursuant to the equity financings described above. The Company also issued to the brokers 1,152,307 five-year warrants pursuant to the equity financings.

The 2,777,268 three-year warrants were ascribed a fair value of $0.4 million which was valued using the Black-Scholes pricing model with the following assumptions: dividend yield 0%; risk free interest 0.18%; volatility 69% and an expected life of 36 months. The warrants were recognized under warrants reserve on the statement of financial position.

The 16,461,539 five-year warrants were ascribed a fair value of $7.8 million which was valued using the Black-Scholes pricing model with the following assumptions: dividend yield 0%; risk free interest 0.46%; volatility 62% and an expected life of 60 months. The warrants were recognized as a derivative warrant liability on the consolidated statement of financial position.

The 1,152,307 five-year warrants issued to the brokers were ascribed a fair value of $0.5 million which was valued using the Black-Scholes pricing model with the following assumptions: dividend yield 0%; risk free interest 0.46%; volatility 62% and an expected life of 60 months. The warrants were recognized under warrants reserve on the consolidated statement of financial position.

Warrants outstanding:

The continuity of outstanding warrants for the year ended August 31, 2022 and year ended August 31, 2021 is as follows:

	Number of warrants			Weighted average exercise price per share
Balance – August 31, 2020		3,289,938		1.19
Warrants issued		20,391,114		0.89
Balance – August 31, 2021		23,681,052		0.94
Warrants issued		18,576,923		0.44
Warrants expired		(287,901	)	0.93
Balance – August 31, 2022		41,970,074		0.72

As at August 31, 2022, the following warrants were outstanding:

	Number of  Warrants		Exercise price		Expiry date
Convertible debenture warrants - July 27, 2020		3,002,037	$	1.21	July 27, 2023
Private placement financing warrants - December 23, 2020		2,777,268	$	1.50	December 23, 2023
Private placement financing warrants - February 11, 2021		16,461,539	$	0.80	February 11, 2026
Private placement financing broker warrants - February 11, 2021		1,152,307	$	0.80	February 11, 2026
Private placement financing warrants – January 26, 2022		17,948,718	$	0.44	January 26, 2027
Private placement financing placement agent warrants – January 26, 2022		628,205	$	0.44	January 26, 2027
Balance, August 31, 2022		41,970,074		-	-

The outstanding warrants have a weighted average exercise price of $0.72 and weighted average remaining contractual life of 3.6 years.