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Stock Options | 12 Months Ended
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Aug. 31, 2023
Stock Options |
Stock Options | 15. Stock Options The Company established an Equity Incentive Plan whereby our Board, pursuant to shareholder approved amendments, may grant up to 809,165 stock options to directors, officers, employees, and consultants with such number being increased to up to 10% of the issued share capital at the end of each calendar year, at the discretion of the board, pursuant to an evergreen formula. While these amendments have been approved by the Company’s shareholders, the Company has not filed an S-8 Registration Statement to register these additional securities, accordingly, until such S-8 Registration Statement is filed with the SEC, the Company may only issue up to 510,433 shares under the current registered Equity Incentive Plan. Stock options may be exercised for a maximum period of up to ten (10) years but to date all currently issued options must be exercised, as determined by our Board, by no later than five years from the date of grant. The exercise price of an option is equal to or greater than the closing market price of the Company’s common shares on the day preceding the date of grant. Vesting terms are set by our Board. The estimated fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model. Fiscal 2023 Activity The Company granted the following stock options during the year ended August 31, 2023:
Options |  |  | Weighted Average Exercise Price |  |  | Contractual Life (years) |
41,200 |  |  | $ | 1.96 |  |  | 5 |
5,000 |  |  | $ | 2.73 |  |  | 5 |
3,400 |  |  | $ | 3.04 |  |  | 5 |
20,000 |  |  | $ | 0.87 |  |  | 5 |
69,600 |  |  | $ | 1.75 |  |  | (Avg. Contractual Life) 5 |
Fiscal 2022 Activity The Company granted the following stock options during the year ending August 31, 2022:
|  |  | Quantity |  |  |  |  |  | Exercise Price $ |  |  | Contractual Life (years) |
|  |  | 81,800 |  |  |  |  |  | 6.23 |  |  | 5 |
|  |  | 36,700 |  |  |  |  |  | 3.39 |  |  | 5 |
|  |  | 103,500 |  |  |  |  |  | 2.91 |  |  | 5 |
August 31, 2022 |  |  | 222,000 |  |  | Average |  |  | 4.21 |  |  | 5 |
During the year ended August 31, 2023, 267,969 previously granted options with exercise prices ranging from $9.60 to $4.80 were repriced to $3.00 following shareholder approval obtained at the Company’s annual shareholder meeting held on May 9, 2023. A continuity schedule for stock options is presented below:
|  | Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term (years) |  |  | Aggregate Intrinsic Value |
Balance August 31, 2021 |  |  | 206,170 |  |  | $ | 8.90 |  |  |  |  |  |  |
Cancelled/expired |  |  | (3,334 | ) |  |  | 9.60 |  |  |  |  |  |  |
Granted |  |  | 222,000 |  |  |  | 4.21 |  |  |  |  |  |  |
Balance August 31, 2022 |  |  | 424,836 |  |  |  | 6.45 |  |  |  |  |  |  |
Cancelled/expired |  |  | (47,500 | ) |  |  | 2.98 |  |  |  |  |  |  |
Granted |  |  | 69,600 |  |  |  | 1.75 |  |  |  |  |  |  |
Balance August 31, 2023 (Outstanding) |  |  | 446,936 |  |  | $ | 3.32 |  |  |  | 3.25 |  |  | $ | 3,600 |
Balance August 31, 2023 (Exercisable) |  |  | 435,186 |  |  | $ | 3.32 |  |  |  | 3.25 |  |  | $ | 3,600 |
The intrinsic value of stock option awards that vested during the fiscal year represents the value of the Company’s closing stock price on the last trading day of the fiscal year in excess of the exercise price multiplied by the number of vested options. The fair value of options awarded during the fiscal years ended August 31, 2023 and August 31, 2022 totaled $89,057 and $680,511, respectively. The fair value of options granted was estimated as of the date of the grant by using the Black-Scholes option pricing model with the following assumptions:
|  | August 31 2023 |  |  | August 31 2022 |
Expected volatility |  |  | 93%-105 | % |  |  | 98% – 119 | %
Risk-free interest rate |  |  | 3.30%-4.69 | % |  |  | 0.78% – 3.30 | %
Expected life |  |  | 2.5 – 5 years |  |  |  | 5 years |
Dividend yield |  |  | 0 | % |  |  | 0 | %
Estimated fair value per option |  |  | 0.33 – 2.32 |  |  |  | $2.25 – $5.10 |
Stock-based compensation expense for the fiscal years ended August 31, 2023 and August 31, 2022 totalled $170,382 and $752,591, respectively. Of the current fiscal year expense, $89,057 relates to current year option awards, $25,194 relates to the repricing of 267,969 options disclosed above, and $56,131 relates to the vesting of options awarded in previous fiscal years.

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