10. STOCK OPTIONS AND WARRANTS

Stock Options

On July 15, 2014, the shareholders approved and adopted at the Annual General Meeting the Company's 2014 Stock Option Plan. The purpose of these Plans is to advance the interests of the Corporation, through the grant of Options, by providing an incentive mechanism to foster the interest of eligible persons in the success of the Corporation and its affiliates; encouraging eligible persons to remain with the Corporation or its affiliates; and attracting new Directors, Officers, Employees and Consultants. The aggregate number of Common Shares that may be reserved, allotted and issued pursuant to Options shall not exceed 17,400,000 shares of common stock, less the aggregate number of shares of common stock then reserved for issuance pursuant to any other share compensation arrangement. For greater certainty, if an Option is surrendered, terminated or expires without being exercised, the Common Shares reserved for issuance pursuant to such Option shall be available for new Options granted under this Plan. The options are deemed as vested and exercisable on issuance and the maximum life of the options granted under this Plan may not exceed 5 years.

On November 12, 2020, the Company issued 500,000 stock options to one of the consultants of the Company with an exercise price of $0.05 vested immediately, expiring November 12, 2025.

On December 14, 2020, the Company issued 2,100,000 stock options to consultants and officers of the Company with an exercise price of $0.05 vested immediately, expiring December 14, 2025.

On January 28, 2021, the Company issued 2,000,000 stock options to one of the consultants of the Company with an exercise price of $0.14 vested immediately, expiring January 28, 2026.

On February 4, 2021, the Company issued 100,000 stock options to one of the consultants of the Company with an exercise price of $0.18 vested immediately, expiring February 4, 2026.

On February 5, 2021, the Company issued 300,000 stock options to three of the consultants of the Company with an exercise price of $0.18 vested immediately, expiring February 5, 2026.

On April 27, 2021, the Company issued 100,000 stock options to one of the consultants of the Company with an exercise price of $0.12 vested immediately, expiring April 27, 2026.

On May 28, 2021, the Company issued 50,000 stock options to one of the consultants of the Company with an exercise price of $0.12 vested immediately, expiring May 28, 2026.

On August 18, 2022, the Company issued 2,000,000 stock options with an exercise price of $0.06 vesting immediately, expiring August 18, 2027. 1,000,000 to the Chief Financial Officer and 500,000 each to two Directors of the Company (Note 8).

On December 6, 2021, the Company issued 250,000 stock options to the president of the Company with an exercise price of $0.07 vested immediately, expiring December 6, 2026.

On December 6, 2021, the Company issued 500,000 stock options to one of the consultants of the Company with an exercise price of $0.07 vested immediately, expiring December 6, 2026.

On December 6, 2021, the Company issued 250,000 stock options to one of the consultants of the Company with an exercise price of $0.07 vested immediately, expiring December 6, 2026.

On September 9, 2021, the Company issued 500,000 stock options to one of the consultants of the Company with an exercise price of $0.08 vested immediately, expiring September 9, 2026.

The fair value of the options granted during the year ended August 31, 2022 and 2021 was estimated on the date of the grant using the Black-Scholes options pricing model, with the following weighted average assumptions:

		2022		2021
Expected dividend yield		0.00%		0.00%
Expected stock volatility		202%		98%
Risk-free interest rate		2.26%		0.41%
Expected life of options (years)		5.00		5.00
Expected forfeiture rate		0.00%		0.00%
Grant date fair value per option	$	0.05	$	0.06

During the year ended August 31, 2022, the Company recorded $163,130 (August 31, 2021 $297,691) as stock-based compensation expense. In addition, the Company issued 113,388 (August 31, 2021: 3,293,224) common shares of the Company as a result of exercise of 226,776 cashless stock options and a total of 3,450,000 stock options expired without being exercised (August 31, 2021: 1,100,000).

A summary of the changes in stock options is presented below:

				Options Outstanding
				Weighted Average
	Number of Shares			Exercise Price
Balance, August 31, 2020	9,320,000		$	0.06
Issued	5,150,000			0.10
Expired	(1,100,000	)		0.05
Exercised	(3,293,224	)		0.04
Balance, August 31, 2021	10,076,776		$	0.08
Issued	3,500,000			0.07
Expired	(3,450,000	)		0.07
Exercised	(226,776	)		0.04
Balance, August 31, 2022	9,900,000		$	0.08

The Company has the following options outstanding and exercisable as at August 31, 2022:

Issue Date	Expiry Date	Exercise Price	Number of Options	Remaining Life
October 27, 2017	October 27, 2022	0.05	800,000	0.16 years
May 11, 2018	May 11, 2023	0.06	500,000	0.69 years
May 22, 2018	May 22, 2023	0.07	450,000	0.72 years
December 14, 2020	December 14, 2025	0.05	2,100,000	3.29 years
January 28, 2021	January 28, 2026	0.14	2,000,000	3.41 years
February 4, 2021	February 4, 2026	0.18	100,000	3.43 years
February 5, 2021	February 5, 2026	0.18	300,000	3.44 years
April 27, 2021	April 27, 2026	0.12	100,000	3.66 years
May 28, 2021	May 28, 2026	0.12	50,000	3.74 years
September 01, 2021	September 01, 2026	0.08	500,000	4.01 years
December 06, 2021	December 06, 2026	0.07	1,000,000	4.27 years
August 18, 2022	August 18, 2027	0.06	2,000,000	4.97 years
Balance outstanding and exercisable		0.08	9,900,000	3.30 years

*As at August 31, 2022 the market price of the Company's common shares was $0.048 per share. The intrinsic value of the stock options was $0.

Warrants

There were no warrants issued during the year ended August 31, 2022.

During the year ended August 31, 2021, the Company issued 1,500,000 warrants attached to units in private placements.

A summary of warrants as at August 31, 2022 and August 31, 2021 is as follows:

				Weighted Average
	Number of warrants			Exercise Price
Balance, August 31, 2020	13,236,869		$	0.05
Issued	1,500,000			0.09
Forfeited	(2,300,000	)		0.05
Exercised	(2,720,000	)		0.04
Balance, August 31, 2021	9,716,869		$	0.05
Forfeited	(1,952,500	)		0.08
Exercised	(2,791,000	)		0.05
Balance, August 31, 2022	4,973,369		$	0.04

The Company has the following warrants outstanding as at August 31, 2022:

Issue Date	Expiry Date	Exercise Price	Number of Warrants*
March 27, 2019	March 27, 2023	0.04	4,973,369
		0.04	4,973,369

*Each warrant entitles a holder to purchase one common share.