Note 7 - Stock-based Awards

9 Months Ended

Jun. 30, 2021

Notes

Note 7 - Stock-based Awards:

NOTE 7 – STOCK-BASED AWARDS:

On October 8, 2020, the Company granted a total of 1,100,000 options to purchase shares of the Company’s common stock that expire in five years with an exercise price of $0.25 in conjunction with the appointment of Patrick Highsmith as CEO (750,000 options), Mr. Steven Osterberg as VP-Exploration (250,000 options), and addition of Mr. Quinton Hennigh to the Board of Directors (100,000 options). Of Mr. Highsmith’s options, 187,500 vested immediately, with 187,500 vesting at each of the following three grant anniversary dates.  

On May 6, 2021, the Company granted a total of 2,785,000 options to employees, consultants, officers and directors to purchase shares of the Company’s common stock that expire in five years with an exercise price of $0.25. All options vested upon issuance.

The fair value of the option awards granted and vested during the three months ended June 30, 2021 and 2020 was $519,400 and nil. The fair value of the option awards granted and vested during the nine months ended June 30, 2021 and 2020 was $646,422 and $161,100, respectively. The fair value of unvested options will be recognized as compensation in the amount of $44,321 in each of the following three years covered by the vesting period. Fair values of options issued

were measured on the date of the grant with a Black-Scholes option-pricing model using the assumptions noted in the following table:

	Options Granted at May 6, 2021	Options Granted at October 8, 2020	Options Granted at October 29, 2019
Expected volatility	167.9%	171.9%	149.5%
Stock price on date of grant	$0.20	$0.25	$ 0.07
Exercise price	$0.25	$0.25	$ 0.08
Expected dividends	-	-	-
Expected term (in years)	5	5	5
Risk-free rate	0.05%	0.09%	1.66%
Expected forfeiture rate	0%	0%	0%
Fair value at grant date	$519,400	$259,985	$161,100

The following is a summary of options issued and outstanding at June 30, 2021:

		Options		Weighted Average Exercise Price
Outstanding at September 30, 2019			3,280,000	$	0.26
Granted			2,550,000		0.08
Expired			(430,000)		(0.43)
Outstanding at September 30, 2020			5,400,000		0.16
	Granted		3,885,000		0.25
	Expired		-		-
Outstanding at June 30, 2021			9,285,000	$	0.20
Outstanding and exercisable at June 30, 2021			8,722,500	$	0.20
Weighted average remaining contractual term (years)					3.22

The aggregate of options exercisable as of June 30, 2021 had an intrinsic value of $517,500, based on the closing price of $0.23 per share of the Company’s common stock on June 30, 2021.