NOTE

13:

CAPITAL STOCK

Equity Financing

September 23, 2020,

we completed a public offering of

12,500,000

units at a price of

$1.20

per unit for gross proceeds of

$15,000,000

(the

“September 2020

Offering”). Each unit was comprised of

one

share of our Company and

one

-half of

one

share purchase warrant, and each whole warrant entitles its holder to acquire

one

share of our Company at an exercise price of

$1.80

per share and expiring

months from the date of issuance. In connection with the

September 2020

Offering, we also issued compensation share purchase warrants to agents as part of share issuance costs to purchase

583,333

shares of our Company exercisable at an exercise price of

$1.80

per share and expiring

months from the date of issuance.

The shares were valued at the Company's closing price of

$0.96

per share at

September 23, 2020.

The share purchase warrants were valued using the Black-Scholes option pricing model with the following assumptions.

Expected Risk Free Interest Rate	0.14	%
Expected Annual Volatility	76.81	%
Expected Contractual Life in Years	2.00
Expected Annual Dividend Yield	0.00	%

The net proceeds from the

September 2020

Offering were allocated to the fair values of the shares and share purchase warrants as presented below.

Fair Value of Shares	$	12,000,000
Fair Value of Share Purchase Warrants		1,445,756
Total Fair Value Before Allocation to Net Proceeds	$	13,445,756

Gross Proceeds	$	15,000,000
Share Issuance Costs - Cash		(878,344	)
Net Cash Proceeds Received	$	14,121,656

Relative Fair Value Allocation to:
Shares	$	12,603,224
Share Purchase Warrants		1,518,432
	$	14,121,656

During Fiscal

2019,

we entered into an At The Market Offering Agreement (the “ATM Offering Agreement”) with H.C. Wainwright & Co., LLC and certain co-managers as set forth in the ATM Offering Agreement (collectively, the “ATM Managers”), as amended in Fiscal

2020,

under which the Company

may,

from time to time, sell shares of its common stock having an aggregate offering price of up to

$30

million through the ATM Managers (collectively, the “ATM Offering”).

During the

three

months ended

January 31, 2021,

we issued

632,487

shares of the Company's common stock at a weighted average price of

$1.74

per share under the ATM Offering for net cash proceeds of

$1,074,337.

Subsequent to

January 31, 2021,

we issued

13,036,419

shares of the Company's common stock at a weighted average price of

$2.22

under the ATM Offering for net cash proceeds of

$28,246,612.

Share Purchase Warrants

A continuity schedule of outstanding share purchase warrants for the

six

months ended

January 31, 2021,

is as follows:

	Number of Warrants			Weighted Average Exercise Price
Balance, July 31, 2020		7,721,981		$	2.03
Issued in connection with September 2020 Offering		6,833,333			1.80
Balance, October 31, 2020		14,555,314			1.92
Exercised		(1,050	)		1.80
Expired		(300,000	)		1.38
Balance, January 31, 2021		14,254,264		$	1.93

A summary of share purchase warrants outstanding and exercisable at

January 31, 2021,

is as follows:

Weighted Average Exercise Price		Number of Warrants Outstanding		Weighted Average Remaining Contractual Life (Years)		Expiry Date
$	2.05		7,063,253		0.17	April 3, 2021
	2.30		308,728		1.52	August 9, 2022
	1.64		50,000		2.30	May 21, 2023
	1.80		6,832,283		1.64	September 23, 2022
$	1.93		14,254,264		0.91

Subsequent to

January 31, 2021,

we received cash proceeds of

$511,726

and issued

435,542

shares upon the exercise of

1,597,333

share purchase warrants.

Stock Options

January 31, 2021,

we had

one

stock option plan, our

2020

Stock Incentive Plan, which superseded and replaced our

2019

Stock Incentive Plan.

A continuity schedule of outstanding stock options for the underlying shares for the

six

months ended

January 31, 2021,

is as follows:

	Number of Stock Options			Weighted Average Exercise Price
Balance, July 31, 2020		15,514,750		$	1.13
Exercised		(28,500	)		0.93
Expired		(1,315,000	)		1.43
Balance, October 31, 2020		14,171,250			1.10
Exercised		(1,100,782	)		1.11
Balance, January 31, 2021		13,070,468		$	1.10

During the

three

and

six

months ended

January 31, 2021

and

2020,

the total number of stock options exercised, the number of shares issued upon exercise of those options and the cash received from such exercises are as follows:

	Three Months Ended January 31,				Six Months Ended January 31,
	2021		2020		2021		2020
Number of Options Exercised on Forfeiture Basis		923,282		-		941,782		-
Number of Options Exercised on Cash Basis		177,500		-		187,500		-
Total Number of Options Exercised		1,100,782		-		1,129,282		-

Number of Shares Issued on Cash Exercise		177,500		-		187,500		-
Number of Shares Issued on Forfeiture Basis		382,028		-		385,560		-
Total Number of Shares Issued Upon Exercise of Options		559,528		-		573,060		-

Cash Received from Exercise of Stock Options	$	212,125	$	-	$	221,434	$	-
Total Intrinsic Value of Options Exercised	$	822,237	$	-	$	828,615	$	-

Subsequent to

January 31, 2021,

we received further cash proceeds of

$381,631

and issued

680,043

shares of the Company upon the exercise of

984,223

stock options.

A continuity schedule of outstanding unvested stock options at

January 31, 2021,

and the changes during the period, is as follows:

	Number of Unvested Stock Options			Weighted Average Grant-Date Fair Value
Balance, July 31, 2020		6,797,471		$	0.46
Vested		(718,755	)		0.46
Balance, October 31, 2020		6,078,716			0.46
Vested		(1,042,559	)		0.48
Balance, January 31, 2021		5,036,157		$	0.45

January 31, 2021,

unrecognized stock-based compensation expense related to the unvested portion of stock options totaled

$1,241,072

to be recognized over the next

1.17

years.

January 31, 2021,

the aggregate intrinsic value under the provisions of ASC

718

of all outstanding stock options was

$7,093,519

(vested:

$3,740,946

and unvested:

$3,352,573

A summary of stock options outstanding and exercisable at

January 31, 2021,

is as follows:

			Options Outstanding						Options Exercisable
Range of Exercise Prices			Outstanding at Janury 31, 2021		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Exercisable at January 31, 2021		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)
$0.80	to	$0.99		7,481,468	$	0.92		7.55		3,816,561	$	0.92		5.98
$1.00	to	$1.49		3,587,000		1.18		4.57		2,215,750		1.24		1.65
$1.50	to	$2.81		2,002,000		1.65		2.29		2,002,000		1.65		2.29
				13,070,468	$	1.10		5.93		8,034,311	$	1.19		3.87

Restricted Stock Units

A summary of outstanding and unvested restricted stock units (“RSU”s) at

January 31, 2021,

is as follows:

Grant Date	Number of Restricted Stock Units		Grant Date Fair Value		Remaining Life (Years)		Aggregate Intrinsic Value
July 30, 2019		310,000	$	0.94		1.49	$	505,300
July 16, 2020		1,305,000		0.91		2.45		2,127,150
		1,615,000	$	0.92		2.27	$	2,632,450

During the

three

and

six

months ended

January 31, 2021,

stock-based compensation relating to the RSUs totaled

$271,834

and

$543,668

(

three

and

six

months ended

January 31, 2020:

$66,928

and

$133,856

), respectively. At

January 31, 2021,

outstanding unvested RSUs totaled

1,615,000

(

July 31, 2020:

1,615,000

), and unrecognized compensation costs relating to unvested RSUs totaled

$771,831,

which is expected to be recognized over a period of approximately

1.16

years.

Performance Based Restricted Stock Units

During the

three

and

six

months ended

January 31, 2021,

stock-based compensation relating to target performance based restricted stock units (“PRSU”s) totaled

$37,544

and

$75,088

(

three

and

six

months ended

January 31, 2020:

$68,165

and

$136,330

), respectively. At

January 31, 2021,

outstanding unvested PRSUs totaled

333,750

(

July 31, 2020:

333,750

), and unrecognized compensation costs relating to unvested PRSUs totaled

$164,264,

which is expected to be recognized over a period of approximately

0.87

years.

Stock-Based Compensation

A summary of stock-based compensation expense is as follows:

	Three Months Ended January 31,				Six Months Ended January 31,
	2021		2020		2021		2020
Stock-Based Compensation for Consultants
Common stock issued to consultants	$	119,847	$	126,150	$	239,317	$	233,758
Amortization of stock option expenses		65,774		53,554		169,702		100,525
		185,621		179,704		409,019		334,283
Stock-Based Compensation for Management
Common stock issued to management		-		34,100		-		68,807
Amortization of stock option expenses		206,317		162,728		460,048		406,105
Amortization of RSU & PRSU expenses		309,378		135,093		618,756		270,186
		515,695		331,921		1,078,804		745,098
Stock-Based Compensation for Employees
Common stock issued to employees		261,642		129,997		474,512		258,025
Amortization of stock option expenses		255,100		156,628		634,238		393,419
		516,742		286,625		1,108,750		651,444

Settlement of share issuance obligation		-		-		-		(15,189	)
	$	1,218,058	$	798,250	$	2,596,573	$	1,715,636