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Stockholders' Equity
 3 Months Ended
May 31, 2017
Notes to Financial Statements  
Note 6. Stockholders' Equity

Common Stock

 

During the three months ended May 31, 2017 the Company sold 1,123,266 shares of its common stock at an offering price of $5.25 per share, resulting in net proceeds to the Company of $5,897,188.

 

Warrants

 

The Company has not adopted a formal stock option plan as of May 31, 2017; however, it has made periodic non-plan grants of warrants for services and financing.

 

During the period ended May 31, 2017, the Company issued to its Chief Financial Officer a warrant to purchase up to 400,000 shares of our common stock at an exercise price of $5.25 per share, which vests quarterly in equal amounts over 24 months beginning on April 3, 2017, and have a contractual life of 10 years. This warrant had a grant date fair value of $2,331,000 as determined by a Black Scholes option pricing model and will be amortized over the vesting period. In addition, the Company issued to its Chief Financial Officer a warrant to purchase up to 150,000 additional shares of our common stock at an exercise price of $5.25 per share that will vest when certain milestones achieved. This warrant had a grant date fair value of $874,125 as determined by a Black Scholes option pricing model and will be amortized as the Company makes progress towards those milestones.

 

During the three months ended May 31, 2017, and 2016, the Company amortized $220,504, and $41,359 respectively, of these costs which are included in operating expenses. As of May 31, 2017, the unamortized balance of these costs was $3,377,143. The aggregate intrinsic value of the warrants outstanding as of May 31, 2017 was $9,325,489 calculated as the difference between the closing market price of $8.05 and the exercise price of the Company’s warrants as of May 31, 2017.

 

During the three months ended May 31, 2017 warrants to purchase an aggregate of 314,667 shares of our common stock expired.

 

The table below summarizes the Company’s warrants activities:

 

    Number of Warrant Shares     Exercise Price Range Per Share     Weighted Average Exercise Price  
                   
Balance, February 28, 2017     1,647,670     $ 0.80 to $6.00     $ 2.91  
                         
Granted     550,000     $ 5.25     $ 5.25  
                         
Exercised     (22,548 )   $ 0.80     $ 0.80  
                         
Expired     (314,667 )   $ 6.00     $ 6.00  
                         
Balance, May 31, 2017     1,860,455     $ 0.80 to $6.00     $ 3.11  
                         
Earned and exercisable, May 31, 2017     836,705     $ 0.80 to $6.00     $ 2.82  
                         
Unvested, May 31, 2017     1,023,750     $ 0.80 to $5.25     $ 3.34  

 

For warrants requiring an assessment of value during the period of May 31, 2017, the fair value of each warrant was estimated using the Black-Scholes option pricing model with the following assumptions:

 

Risk-free interest rate     2.02 %
Expected dividend yield     0 %
Expected volatility     110.72 %
Expected life     6 years  

 

As at May 31, 2017, 20,000 shares of common stock were issued as a result of a cashless exercise of 22,548 warrants with an exercise price of $0.80 per share.

 

The following table summarizes information concerning outstanding and exercisable warrants as of May 31, 2017:

 

      Warrants Outstanding     Warrants Exercisable  
Range of Exercise Prices     Number Outstanding     Average Remaining Contractual Life (in years)     Weighted Average Exercise Price     Number Exercisable     Average Remaining Contractual Life (in years)     Weighted Average Exercise Price  
                                       
$ 0.80       912,452       0.51     $ 0.80       507,452       0.51     $ 0.80  
$ 6.00       323,003       0.08     $ 6.00       323,003       0.08     $ 6.00  
$ 3.00       75,000       1.02     $ 3.00       6,250       1.02     $ 3.00  
$ 5.25       550,000       9.98     $ 5.25       -       -     $ -