Note 8 - Common Stock, Warrants and Preferred Stock

12 Months Ended

Sep. 30, 2021

Notes

Note 8 - Common Stock, Warrants and Preferred Stock:

NOTE 8 – COMMON STOCK, WARRANTS AND PREFERRED STOCK:

At the Annual General Meeting of shareholders held on April 14, 2021, the shareholders approved an increase in the number of authorized common shares of the Company from 200,000,000 to 500,000,000, with no change in par value and no split or other modification to any outstanding shares. The Certificate of Incorporation of the Company in the State of Delaware was amended to reflect that change in October 2021.

Private Placements

On October 23, 2019, the Company closed a private placement offering with accredited investors for 7,500,000 units of the Company at a price of US$0.08 per unit, for total proceeds to the Company of $600,000. Each unit consisted of one share of common stock of the Company and one-half common share purchase Series J warrant (each whole such warrant a “Warrant”), with each Warrant exercisable to acquire an additional share of common stock of the Company at a price of US$0.12 per share until the warrant expiration date of October 15, 2024. As a result, 7,500,000 shares of common stock of the Company and 3,750,000 Warrants were issued and 3,750,000 shares of common stock were reserved for issuance pursuant to Warrant exercises. A director of the Company, William Matlack, participated in the offering and subscribed for 7,125,000 units. The Warrants comprised in Mr. Matlack’s units contain a voluntary restriction on exercise preventing Mr. Matlack from completing any Warrant exercise if such exercise would cause him to beneficially own or control 20% or more of the issued and outstanding common shares of Timberline.

On August 17, 2020, the Company closed a private placement offering with accredited investors for 33,636,364 units of the Company at a price of US$0.11 per unit, for total proceeds to the Company of $3,700,000. Each unit consisted of one share of common stock of the Company and one common share purchase Series L Warrant, with each warrant exercisable to acquire an additional share of common stock of the Company at a price of US$0.20 per share until the warrant expiration date of August 15, 2023. The Company incurred total costs of $102,000 related to this financing. As a result, 33,636,364 shares of common stock of the Company and 33,636,364 warrants were issued and 33,636,364 shares of common stock were reserved for issuance pursuant to warrant exercises. Two directors of the Company, William Matlack and Steven Osterberg, participated in the offering and subscribed for 909,091 units for total proceeds of $100,000. The warrants comprised in Mr. Matlack’s units contain a voluntary restriction on exercise preventing Mr. Matlack from completing any warrant exercise if such exercise would cause him to beneficially own or control 20% or more of the issued and outstanding common shares of Timberline.

On June 25, 2021, the Company closed on total subscriptions for a private placement offering for 23,070,798 Units of the Company at a price of $0.20 per Unit. Each Unit consisted of one share of common stock of the Company and one-half common share purchase Series M Warrant (each whole such warrant a “Warrant”), with each Warrant exercisable to acquire an additional share of common stock of the Company at a price of $0.30 per share until the Warrant expiration date of May 31, 2023. A total of 23,070,798 shares and 11,535,399 Warrants issued for net proceeds of $4,475,818 to the Company, net of $138,342 finders fees to third parties. In addition, 596,248 Series M Warrants were issued for finders fees.

Warrants

During the fiscal year ended September 30, 2020, a total of 37,386,364 Series J and Series L Warrants were issued pursuant to two private placement offerings. A total of 3,543,600 Series I Warrants were exercised for shares of common stock. Additionally, 3,265,500 Series F warrants were canceled and replaced by 4,000,000 Series K Warrants as part of the extension of a Senior unsecured note payable described in Note 5.

During the fiscal year ended September 30, 2021, 12,131,647 Series M Warrants were issued pursuant to a private placement offering. A total of 4,550,000 warrants were exercised for shares of common stock for a total of $637,001 cash proceeds to the Company. Total warrants of 9,000,000 and 8,000,000 expired during the fiscal years ended September 30, 2021 and 2020, respectively. There were 74,216,319 and 75,634,670 warrants outstanding as of September 30, 2021 and 2020, respectively.

Fair values of warrants issued with equity transactions was recorded as recorded to Additional paid-in capital. The valuation model used the following inputs:

	Warrants Issued During the Year Ended September 30, 2020
Expected volatility	147.2% - 171.6%
Stock price on date of the note	$0.07 - $0.11
Exercise price	$0.08 - $0.20
Expected dividends	-
Expected term (in years)	3.0 -3.333
Risk-free rate	.0.667% - 1.34%
Expected forfeiture rate	0%

The following is a summary of warrants as of September 30, 2021:

	Shares	Exercise Price ($)	Expiration Date
Series C Warrants: (Issued for Private Placement)
Outstanding and exercisable at September 30, 2019	2,880,867	0.45	October 31, 2022
Outstanding and exercisable at September 30, 2020	2,880,867
Outstanding and exercisable at September 30, 2021	2,880,867
Series D Warrants: (Issued for Private Placement)
Outstanding and exercisable at September 30, 2019	7,500,000	0.14	April 30, 2021
Outstanding and exercisable at September 30, 2020	7,500,000
Exercised	(3,500,000)
Expired	(4,000,000)
Outstanding and exercisable at September 30, 2021	-
Series D-2 Warrants: (Issued for Mineral Property Purchase)
Outstanding and exercisable at September 30, 2019	5,000,000	0.24	May 23, 2021
Outstanding and exercisable at September 30, 2020	5,000,000
Expired	(5,000,000)
Outstanding and exercisable at September 30, 2021	-
Series E Warrants: (Issued for Private Placement)
Outstanding and exercisable at September 30, 2019	7,500,000	0.14	October 29, 2021
Outstanding and exercisable at September 30, 2020	7,500,000
Exercised	(675,000)
Outstanding and exercisable at September 30, 2021	6,825,000
Series F Warrants: (Issued for Unsecured Senior Note)
Outstanding and exercisable at September 30, 2019	3,265,500	0.09	February 1, 2023
Exchanged for Series K warrants	(3,265,500)
Outstanding and exercisable at September 30, 2020	-
Outstanding and exercisable at September 30, 2021	-
Series G Warrants: (Issued for Mineral Property Purchase)
Outstanding and exercisable at September 30, 2019	5,000,000	0.24	December 18, 2021
Outstanding and exercisable at September 30, 2020	5,000,000
Outstanding and exercisable at September 30, 2021	5,000,000
Series H Warrants: (Issued for Private Placement)
Outstanding and exercisable at September 30, 2019	6,367,441	0.14	March 22, 2022
Outstanding and exercisable at September 30, 2020	6,367,441
Exercised	(375,000)
Outstanding and exercisable at September 30, 2021	5,992,441
Series I Warrants: (Issued for Unsecured Note Payable)
Outstanding and exercisable at September 30, 2019	3,543,600	0.07	November 7, 2020
Exercised	(3,543,600)
Outstanding and exercisable at September 30, 2020	-
Outstanding and exercisable at September 30, 2021	-
Series J Warrants: (Issued for Private Placement)
Warrants Issued October 15, 2019	3,750,000	0.12	October 15, 2024
Outstanding and exercisable at September 30, 2020	3,750,000
Outstanding and exercisable at September 30, 2021	3,750,000
Series K Warrants: (Issued for Extension of Unsecured Note Payable)
Warrants Issued January 20, 2020 in exchange for Series F warrants	4,000,000	0.08	January 20, 2023
Outstanding and exercisable at September 30, 2020	4,000,000
Outstanding and exercisable at September 30, 2021	4,000,000
Series L Warrants: (Issued for Private Placement)
Warrants Issued August 15, 2020	33,636,364	0.20	August 15, 2023
Outstanding and exercisable at September 30, 2020	33,636,364
Outstanding and exercisable at September 30, 2021	33,636,364
Series M Warrants: (Issued for Private Placement)
Warrants Issued June 25, 2021	12,131,647	0.30	May 21, 2023
Outstanding and exercisable at September 30, 2021	12,131,647
Warrants outstanding and weighted average exercise price at September 30, 2021	74,216,319	0.21

Preferred Stock

The Company is authorized to issue up to 10,000,000 shares of preferred stock, $0.01 par value. The Company’s board of directors is authorized to issue the preferred stock from time to time in series, and is further authorized to establish such series, to fix and determine the variations in the relative rights and preferences as between series, to fix voting rights, if any, for each series, and to allow for the conversion of preferred stock into common stock. There was no preferred stock issued as of September 30, 2021 and 2020.