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Stock Options | 12 Months Ended
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Aug. 31, 2024
Stock Options |
Stock Options | 13. Stock Options The Company established an Equity Incentive Plan whereby our Board, pursuant to shareholder approved amendments, may grant up to 1,037,544 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. 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 of or 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 2024 Activity The Company granted the following stock options during the year ended August 31, 2024:
Grant Date |  | Granted Quantity |  |  | Exercise Price |  |  | Contractual Life (years) |
10/26/2023 |  |  | 85,000 |  |  | $ | 1.15 |  |  |  | 5 |
3/15/2024 |  |  | 200,000 |  |  | $ | 2.93 |  |  |  | 5 |
4/26/2024 |  |  | 151,500 |  |  | $ | 2.36 |  |  |  | 5 |
7/26/2024 |  |  | 48,000 |  |  | $ | 3.39 |  |  |  | 5 |
7/26/2024 |  |  | 12,000 |  |  | $ | 3.39 |  |  |  | 2 |
8/31/2024 |  |  | 200,000 |  |  | $ | 3.92 |  |  |  | 5 |
|  |  | 696,500 |  |  | $ | 2.91 |  |  |  | 4.95 |
Of the 200,000 options granted on March 15, 2024, 150,000 were subsequently cancelled and 50,000 were fully vested. 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 |
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, 2022 |  |  | 424,836 |  |  |  | 6.45 |  |  |  |  |  |  |
Cancelled/expired |  |  | (47,500 | ) |  |  | 2.98 |  |  |  |  |  |  |
Granted |  |  | 69,600 |  |  |  | 1.75 |  |  |  |  |  |  |
Balance August 31, 2023 |  |  | 446,936 |  |  | $ | 3.32 |  |  |  | 3.25 |  |  | $ | 3,600 |
Cancelled/expired |  |  | (196,000 | ) |  | $ | 2.94 |  |  |  | 4.27 |  |  |  |  |
Exercised |  |  | (2,500 | ) |  | $ | 1.15 |  |  |  | 4.16 |  |  |  |  |
Granted |  |  | 696,500 |  |  | $ | 2.91 |  |  |  | 4.63 |  |  |  |  |
Balance August 31, 2024 (Outstanding) |  |  | 944,936 |  |  |  | 3.11 |  |  |  | 3.64 |  |  |  | 971,959 |
Balance August 31, 2024 (Exercisable) |  |  | 734,936 |  |  |  | 2.88 |  |  |  | 3.31 |  |  |  | 971,959 |
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, 2024 and August 31, 2023 totaled $1,267,732 and $89,057, 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, 2024 |  |  | August 31, 2023 |
Expected Volatility |  | 92%-98 | % |  | 98%-119 | %
Risk Free interest rate |  | 3.77%-5.03 | % |  | 0.78%-3.30 | %
Expected life |  | 2.5-4.0 years |  |  | 5.0 years |
Dividend Yield |  |  | 0.00 | % |  |  | 0.00 | %
Estimated fair value per option |  | $0.63-$2.57 |  |  | $2.25-$5.10 |
Stock-based compensation expense for the fiscal years ended August 31, 2024 and August 31, 2023 totaled $492,236 and $170,382, respectively. Of the current fiscal year expense, $453,119 relates to current year option awards, and $39,117 relates to the vesting of options awarded in previous fiscal years. As of August 31, 2024, unrecognized non-cash stock-based compensation expense totaled $533,619 related to 210,000 unvested stock options with a weighted average exercise price of $3.89. This expense is expected to be recognized over a weighted average period of 2.26 years.

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