Warrant liabilities

3 Months Ended

Oct. 31, 2025

11.	Warrant liabilities

Impact of Change in Functional Currency on August 1, 2024

As at July 31, 2024, the Company had 132,811 warrants outstanding. The exercise price of these warrants is denominated in CAD. Due to the change in functional currency of the Company, a total of 121,995 warrants which were issued in connection with the Company’s reverse merger on November 4, 2022 and for private placements with an initial carrying value of $1,836,666 were reassessed to be derivative liabilities. The fair value of the warrants upon the change in classification on August 1, 2024 of $454,571, was remeasured using the Black-Scholes option pricing model, with the following assumptions (weighted average): expected dividend yield - 0%, expected volatility - 105%, risk-free interest rate – 3.49% and an expected remaining life – 0.7 years. The fair value of these warrants is classified as Level 2 in the fair value hierarchy. The difference between the previous carrying value which was initially recorded as equity and the fair value of the warrant liabilities on August 1, 2024 was $1,382,096. Pursuant to ASC 815-40-35-9, the difference is recognized within equity.

10,816 of the warrants outstanding on August 1, 2024 were issued to brokers as compensation for finders fees (the “Broker Warrants”) and fall under the Scope of ASC 718, Stock-based Compensation. As the Company’s stock was primarily traded on the Cboe Exchange in Canadian dollars during the three months ended October 31, 2024, the exemption under ASC 718-10-25-14A is met and the Broker Warrants remain equity classified.

Changes to warrant liability during the three months ended October 31, 2025

As at October 31, 2025, the fair value of the liability classified warrants were remeasured at $3,343,175 using the Black-Scholes option pricing model, with the following assumptions (weighted average): expected dividend yield - 0%, expected volatility - 150%, risk-free interest rate – 2.70% and an expected remaining life of 4.02 years. The Company recognized ($2,283,298) as a change in fair value for the three months ended October 31, 2025.

The following is a continuity of the Company’s derivative warrant liabilities:

Balance as at July 31, 2024	$	-
Warrants fair value upon change in functional currency (Note 2)		454,571
Warrants issued upon De-SPAC transaction (Note 4)		7,196,286
Warrants to be issued (mandatory convertible debentures)		7,500
Change in fair value of warrant liabilities (exercised warrants)		162,396
Change in fair value of warrant liabilities (expired warrants)		(25,067	)
Fair value of warrants exercised		(303,492	)
Change in fair value of warrant liabilities		(1,865,721	)
Balance as at July 31, 2025	$	5,626,473
Change in fair value of warrant liabilities		(2,283,298	)
Balance as at October 31, 2025	$	3,343,175