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Share Capital and Reserves
12 Months Ended
Jun. 30, 2024
Share Capital and Reserves [Abstract]  
SHARE CAPITAL AND RESERVES
7. SHARE CAPITAL AND RESERVES

 

Authorized

 

As of June 30, 2024, the Company’s authorized share structure consisted of: (i) an unlimited number of common shares without par value; and (ii) an unlimited number of preferred shares without par value. No preferred shares were issued and outstanding as of June 30, 2024 and 2023.

 

The Company may, from time to time, issue preferred shares and may, at the time of issuance, determine the rights, preferences and limitations pertaining to these shares. Holders of preferred shares may be entitled to receive a preference payment in the event of any liquidation, dissolution or winding up of the Company before any payment is made to the holders of common shares.

 

On June 27, 2024, the Company entered into an amendment (the “ATM Amendment”) to its At-the-Market Offering Agreement, dated April 7, 2022 (the “Original ATM Agreement” and together with the ATM Amendment, the “Amended ATM Agreement”), pursuant to which the Company may offer and sell shares of the Company’s common shares, no par value per share (the “Common Shares”), from time to time, in “at the market” offerings through the Agent. The Original ATM Agreement was previously filed with the Securities and Exchange Commission on April 7, 2022 on the Company’s Current Report on Form 8-K. The ATM Amendment amends the Original ATM Agreement to reflect, among other provisions, updates to certain sales settlement provisions and reimbursement terms, and to supplement the representations being made by the Company to the Agent.

 

On October 24, 2023, the Company entered into a securities purchase agreement (the “2023 Securities Purchase Agreement”) with two accredited institutional investors (the “Accredited Institutional Investors”) for the sale (the “2023 Private Placement”) of 3,012,049 pre-funded warrants of the Company’s common shares at a purchase price of $0.83 per share. The pre-funded warrants have an exercise price of $0.0001 and do not have an expiration date. The pre-funded warrants had a fair value of $1,248,376 at the time of issuance. As of June 30, 2024, there were 694,017 pre-funded warrants outstanding. In addition, the Company agreed, as part of the 2023 Private Placement, to issue to the purchasers unregistered preferred investment options to purchase up to an aggregate of 3,012,049 common shares. These preferred investment options have an exercise price of $0.83 and have a term of 5.5 years from issuance. The preferred investment options had a fair value of $1,251,449 at the time of their issuance.

 

Concurrently with the Company’s entry into the 2023 Securities Purchase Agreement, the Company also entered into an inducement offer letter agreement (the “Inducement Offer Letter”) with the holders of existing preferred investment options (the “Existing Holders”) to purchase up to an aggregate of 3,272,733 common shares issued to the Existing Holders on November 21, 2022. Pursuant to the Inducement Offer Letter, the Existing Holders agreed to exercise for cash their existing preferred investment options to purchase an aggregate of 3,272,733 common shares (at a reduced exercise price of $0.83 per share) in consideration of the Company’s agreement to issue new unregistered preferred investment options to purchase up to an aggregate of 6,545,466 shares of the Company’s common shares at an exercise price of $0.83 per share). Due to ownership limitations, the Accredited Institutional Investors had 1,796,552 common shares held in abeyance as of the closing of the 2023 Private Placement. The abeyance shares had a fair value of $1,491,138 and the common shares issued had a fair value of $1,225,230 on their respective issuance date. As of June 30, 2024, the Accredited Institutional Investors had drawn down 1,796,552 abeyance shares.

 

The inducement contemplated by the Inducement Offer Letter (the “Inducement”) is considered a warrant modification due to the changing of the terms of the warrants. The modification had a fair value of $3.5 million as of the date of the Inducement, using a Black-Scholes model and is recognized as an equity issuance cost in accordance with ASC 718-20-35-3.

 

On October 26, 2023, the parties consummated the 2023 Private Placement and the other transactions contemplated by the 2023 Securities Purchase Agreement. In connection with such transactions, the Company (i) received gross proceeds of approximately $5.2 million and paid approximately $560,000 in cash fees and (ii) issued 408,511 warrants to our placement agent. These warrants have an exercise price of $1.0375 and a term of 5.5 years. The placement agent warrants had a fair value of $325,699 as of the date of their issuance, using a Black-Scholes model and were recorded as an equity issuance cost.

 

On September 13, 2022, the Company closed a private placement of its common shares and issued an aggregate of 90,000 common shares and 601,245 pre-funded warrants, for gross proceeds of $5,999,946. The pre-funded warrants were determined to be common stock equivalents. Each common share and each pre-funded warrant were sold in the offering with an investment option to purchase a common share. Transaction costs were allocated proportionally between common shares and investment options with $77,242 allocated to common shares and the balance of $1,052,101 allocated to additional paid-in capital and recorded as a component of shareholders’ equity in the consolidated balance sheet. As of June 30, 2023, there were no pre-funded warrants outstanding.

 

In connection with the September 13, 2022, private placement the company issued 1,382,490 warrants. These warrants were issued with an exercise price of $8.44 per share, were immediately exercisable upon issuance, and expire 7 years following the date of issuance. On November 21, 2022, these preferred investment options were surrendered to the Company for cancellation.

 

On November 21, 2022, the Company closed a private placement of its common shares and issued an aggregate of 150,000 common shares and 1,668,185 pre-funded warrants, for gross proceeds of $5,999,844. The pre-funded warrants were determined to be common stock equivalents. Each common share and each pre-funded warrant were sold in the offering with an investment option to purchase a common share. Transaction costs were allocated proportionally between common shares and investment options with $38,713 allocated to common shares and the balance of $831,292 allocated to additional paid-in capital and recorded as a component of shareholders’ equity in the consolidated balance sheet. As of June 30, 2023, there were no pre-funded warrants outstanding.

 

In connection with the November 21, 2022, private placement the company issued 3,272,733 warrants. These warrants were issued with an exercise price of $3.044 per share, were immediately exercisable upon issuance, and expire 7 years following the date of issuance. The allocated value of these investment options was recorded in additional paid-in capital.

 

Common Share Warrants

 

The assumptions used in the Black-Scholes model to value the new warrants issued during the years ended June 30, 2024 and 2023, are set forth in the table immediately below.

 

   June 30,
2024
 
Exercise price  $0.83 – 1.04 
Risk-free interest rate   4.82%
Volatility   109 – 111%
Expected life (years)   5.0 – 5.5 
Dividend yield  $0%

 

   June 30,
2023
 
Exercise price  $3.04 – 8.44 
Risk-free interest rate   2.92 – 3.12%
Volatility   114 - 117%
Expected life (years)   7 Years 
Dividend yield  $0%

 

The assumptions used in the Black-Scholes model to value the modification of warrants issued during the year ended June 30, 2024, are set forth in the table immediately below.

 

   2024 
Exercise price  $0.83 – 3.04 
Risk-free interest rate   0.56 – 4.82%
Volatility   109 – 614%
Expected life (years)   0 – 6.8 
Dividend yield  $0%

 

A summary of the Company’s warrant activity and related information for the periods covered were as follows:

 

   Number of
Shares
Under
Warrants
   Weighted
Average
Exercise
Price
 
Balance as at July 1, 2022   505,128   $31.92 
Granted   4,818,336    4.69 
Expired / Cancelled Exercised   (1,806,935)   10.75 
Exercised   
-
    
-
 
Balance as at June 30, 2023   3,516,529   $5.37 
Warrants Granted   12,978,075    0.64 
Exercised   (5,590,765)   0.49 
Expire/Cancelled   (17,778)   18.50 
Warrants Outstanding at June 30, 2024   10,886,061   $1.06 
           
Warrants Exercisable at June 30, 2024   10,886,061   $1.06 

 

As of June 30, 2024 and 2023, the warrants exercisable and outstanding have an intrinsic value of $184,539 and $0 respectively with a weighted average remaining life of 4 years and 6 years respectively.