Note 5 - Capital Stock and Warrants

3 Months Ended

Sep. 30, 2018

Notes

Note 5 - Capital Stock and Warrants

Note 5 – Capital Stock and Warrants

            Authorized

The total authorized capital is as follows:

-          300,000,000 common shares with a par value of $0.001 per common share; and

-          10,000,000 preferred shares with a par value of $0.001 per preferred share

Issued and outstanding

In August 2018, the Company closed a private placement, issuing 1,604,076 Units to Gemstone 102 Ltd. (“Gemstone”) at a price of C$0.45 per Unit. Each Unit entitles Gemstone to acquire one common share (“Unit Share”) and one common share purchase warrant (“Unit Warrant”), with each Unit Warrant entitling Gemstone to acquire one common share of the Company at a price of C$0.45 for a period of three years. Prior to the issuance of the Units, Gemstone held 4,000,000 common shares of the Company (12.12%) and 2,000,000 warrants (“Prior Warrants”) exercisable at a price of C$2.00 per share (16.21% on a partially diluted basis). Immediately prior to closing, the Prior Warrants were early terminated by mutual agreement of the Company and Gemstone. Upon issuance of the 1,604,076 Units to Gemstone, Gemstone beneficially owns or exercises control or direction over 5,604,076 common shares of the Company representing 16.2% of the issued and outstanding shares. Assuming exercise of the Unit Warrants, Gemstone would hold 7,208,152 of the outstanding common shares of the Company, representing 19.90% of the issued and outstanding common shares of Bunker. Gemstone’s participation in the Offering constitutes a "related party transaction" under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101").

At September 30, 2018, there were 34,617,791 common shares issued and outstanding.

Warrants

As of September 30, 2018, the Company had 7,406,374 warrants outstanding, with exercise prices from C$0.45 to C$2.00, expiring from December 5, 2020 to August 9, 2021.

Stock Options

In September 2018, 437,500 fully-vested stock options were issued to a consultant to whom C$350,000 was due and payable and reflected in accrued liabilities at September 30, 2018.  These options had a 5-year life and were exercisable at CDN$0.80 per share.  On October 3, 2018, these options were exercised in full, with consideration received being the liability already on the Company’s books, extinguishing the liability in full.

The fair value of these stock options was determined on the date of grant using the Black-Scholes valuation model, and using the following underlying assumptions:

Year	Risk free interest rate	Dividend yield	Volatility	Weighted average life
2018	2.32%	0%	100%	5 years