STOCK OPTIONS AND WARRANTS

12 Months Ended

Aug. 31, 2021

Share-based Payment Arrangement [Abstract]

9. STOCK OPTIONS AND WARRANTS

Stock Options

On July 15, 2014, the shareholders approved and adopted at the Annual General Meeting the Company's 2014 Stock Option Plan. On April 14, 2011, the shareholders approved and adopted at the Annual General Meeting to consolidate the Company's 2007 Equity compensation plan and the Company's 2010 Equity Compensation Plan into a new Company 2011 Stock Option Plan. The purpose of these Plans is to advance the interests of the Corporation, through the grant of Options, by providing an incentive mechanism to foster the interest of eligible persons in the success of the Corporation and its affiliates; encouraging eligible persons to remain with the Corporation or its affiliates; and attracting new Directors, Officers, Employees and Consultants.

For the year ended August 31, 2021, the Company recorded $297,691 (2020 - $17,308) stock-based compensation expense.

A summary of the changes in stock options is presented below:

				Options Outstanding
				Weighted Average
	Number of Shares			Exercise Price
Balance, August 31, 2019	8,320,000		$	0.07
Issued	2,000,000			0.02
Expired	(1,000,000	)		0.10
Balance, August 31, 2020	9,320,000		$	0.06
Issued	5,150,000			0.10
Expired	(1,100,000	)		0.05
Exercised	(3,293,224	)		0.02
Balance, August 31, 2021	10,076,776		$	0.08

The fair value of options granted has been estimated as of the date of the grant by using the Black-Scholes option pricing model with the following assumptions:

	August 31, 2021	August 31, 2020
Expected volatility	91% - 149%	163%
Risk-free interest rate	0.40% -0.68%	1.16%
Expected life	5 years	2 years
Dividend yield	NIL	NIL
Estimated fair value per option	$0.02 -$0.12	$0.01

The Company has the following options outstanding and exercisable.

Issue Date	Expiry Date	Exercise Price	Number of Options	Remaining Life
September 19, 2016	September 19, 2021	0.07	500,000	0.05 years
January 20, 2017	January 20, 2022	0.07	1,200,000	0.39 years
January 31, 2017	January 31, 2022	0.07	1,250,000	0.42 years
May 2, 2017	May 2, 2022	0.10	500,000	0.67 years
October 27, 2017	October 27, 2022	0.05	800,000*	1.16 years
May 11, 2018	May 11, 2023	0.06	500,000*	1.69 years
May 22, 2018	May 22, 2023	0.07	450,000	1.72 years
February 25, 2020	February 25, 2022	0.02	226,776*	0.49 years
December 14, 2020	December 14, 2025	0.05	2,100,000*	4.29 years
January 28, 2021	January 28, 2026	0.14	2,000,000	4.41 years
February 4, 2021	February 4, 2026	0.18	100,000	4.43 years
February 5, 2021	February 5, 2026	0.18	300,000	4.44 years
April 27, 2021	April 27, 2026	0.12	100,000	4.66 years
May 28, 2021	May 28, 2026	0.12	50,000	4.74 years

		0.08	10,076,776	2.40 years

*As at August 31, 2021 the market price of the Company's common shares was $0.0629 per share. A total of 3,626,776 incentive stock options were in the money with an intrinsic value of $48,589.

Warrants

During the year ended August 31, 2021, the Company issued 1,500,000 warrants attached to units in private placements with no finders fees being paid.

There were no warrants issued during the year ended August 31, 2020.

A summary of warrants as at August 31, 2021 and August 31, 2020 is as follows:

				Weighted Average
	Number of warrants			Exercise Price
Balance, August 31, 2019	26,141,459		$	0.06
Expired	(12,904,590	)		0.07
Balance, August 31, 2020	13,236,869		$	0.05
Issued	1,500,000			0.09
Forfeited	(2,300,000	)		0.05
Exercised	(2,720,000	)		0.04
Balance, August 31, 2021	9,716,869		$	0.05

The Company has the following warrants outstanding:

August 31, 2021
Issue Date	Expiry Date	Exercise Price	Number of Warrants*
September 21, 2018	September 21, 2021	0.05	2,427,500
March 27, 2019	March 27, 2023	0.04	5,789,369
January 14, 2021	January 14, 2022	0.09	1,500,000

		0.05	9,716,869

*Each warrant entitles a holder to purchase one common share.