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Issuances of Common Shares and Warrants | 3 Months Ended
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Nov. 30, 2024
Issuances of Common Shares and Warrants |
Issuances of Common Shares and Warrants | 12. Issuances of Common Shares and Warrants During the three-months ended November 30, 2024, the Company completed the following issuances of common shares and warrants:
1. | On October 16, 2024, the Company entered into a Securities Purchase Agreement whereby we issued 1,633,987 shares of common stock at a purchase price of $3.06 per share for gross and net proceeds of $5.0 million and $4.5 million, respectively. Concurrently, the Company issued, by way of a private placement transaction, 4,551,019 share purchase warrants, entitling the holder thereof to purchase up to 4,551,019 shares of common stock at a price of $3.06 per share for a period of five years from the date of shareholder approval for such warrant issuance. The shares registered pursuant to a take down of the Company’s Form S-3 registration statement and the warrants and related warrant shares were registered pursuant to a Form S-3 registration statement As part of the terms and conditions of the warrant issuance, the sole investor agreed to cancel the 2,917,032 share purchase warrants bearing an exercise price of $4.75 that were issued to them in the April 30, 2024 financing. We also issued the placement agent warrants to purchase up to 57,190 shares at an exercise price of $3.825 per share.
2. | In October 2024, the Company sold 8,402 shares of common stock through an At the Market (ATM) offering for gross proceeds of $26,146. Share issuance costs related to the ATM offering of $144,812 were charged to additional paid in capital.
A continuity schedule for warrants for the three-months ended November 30, 2024, is presented below:
|  | Number of Warrants |  |  | Weighted Average Exercise Price $ |
Balance, August 31, 2024 |  |  | 5,931,649 |  |  |  | 5.50 |
Cancelled/Expired |  |  | (2,977,830 | ) |  |  | 5.39 |
Balance, November 31, 2024 |  |  | 2,953,819 |  |  |  | 5.62 |
A summary of warrants outstanding as of November 30, 2024, is presented below:
Number of Warrants |  |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life ~in years~ |
317,190 |  |  | 10.50 |  | .68-.69 |
16,667 |  |  | 9.00 |  | 0.54 |
1,719,828 |  |  | 6.58 |  | 1.13 |
483,750 |  |  | 0.95 |  | 3.45 |
314,287 |  |  | 2.31 |  | 4.22 |
102,097 |  |  | 5.94 |  | 4.22 |
2,953,819 |  | $ | 5.62 |  | 1.86 |
The share purchase and placement agent warrants issued on October 16, 2024 are exercisable on or after the related stockholder approval date. Because they were not exercisable as of November 30, 2024, they are excluded from the continuity table and summary of warrants outstanding above. Stock Options The Company established an Equity Incentive Plan whereby our Board, pursuant to shareholder approved amendments, may grant up to 1,745,259 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 currently granted must be exercised within five years from the date of grant or such lesser period as determined by the Company’s board of directors. The vesting terms of each grant are also set by the board of directors. The exercise price of an option is equal to or greater than the closing market price of the Company’s common shares on the date of grant. 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, 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 |  |  | 944,936 |  |  |  | 3.11 |  |  |  | 3.64 |  |  | $ | 971,959 |
Cancelled/expired |  |  | (16,667 | ) |  |  | 16.50 |  |  |  | - |  |  |  |  |
Granted |  |  | 82,000 |  |  |  | 2.91 |  |  |  | 4.88 |  |  |  |  |
Balance November 30, 2024 (outstanding) |  |  | 1,010,269 |  |  |  | 2.87 |  |  |  | 3.47 |  |  | $ | 105,869 |
Balance November 30, 2024 (exercisable) |  |  | 745,269 |  |  |  | 2.56 |  |  |  | 3.18 |  |  | $ | 105,869 |
On October 1, 2024, the Company granted 62,000 options to its employees with an exercise price of $3.17 and a term of 5 years. The options granted vest as follows: 4,000 at grant date, 20,000 on February 28, 2025, and 38,000 over a period of two years. On November 27, 2024, the Company granted 20,000 fully vested options to its Scientific Advisory Board members with an exercise price of $2.10 and a term of 5 years. The fair value of stock options granted in the three-months ended November 30, 2024, were estimated as of the date of the grant by using the Black-Scholes option pricing model with the following assumptions:
November 30, 2024 |  |  |
Expected volatility |  | 94-96 | %
Risk-free interest rate |  | 3.57-4.18 | %
Expected life |  | 2.50 | years
Dividend yield |  |  | 0.00 | %
Estimated fair value per option |  | $ | 1.21-1.72 |
Stock-based compensation expense for the three-month periods ended November 30, 2024, and 2023, was $99,415 and $53,953, respectively. As of November 30, 2024, the total unrecognized non-cash compensation costs are $627,783 related to 265,000 non-vested stock options with a $3.74 weighted average exercise price. These costs are expected to be recognized over a weighted average period of 1.97 years.

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