Capital stock, warrants and stock options | 10. Capital stock, warrants and stock options Authorized The total authorized capital is as follows: ● 750,000,000 0.000001 ● 10,000,000 0.000001 On May 23, 2019, the Company affected a consolidation of its issued and outstanding share capital on the basis of one (1) post-consolidation share for each ten (10) pre-consolidation common shares, which has been retrospectively applied in these consolidated financial statements. On July 19, 2019, the Company amended its articles of incorporation to change the total authorized capital and the par values, which have been retrospectively applied in these consolidated financial statements. Bunker Hill Mining Corp. Notes to Consolidated Financial Statements Six Months Ended December 31, 2020 and Years Ended June 30, 2020 and 2019 (Expressed in United States Dollars) 10. Capital stock, warrants and stock options (continued) Issued and outstanding On June 27, 2019, the Company closed the first tranche (the “First Tranche”) of a non-brokered private placement, issuing 11,660,000 583,000 436,608 19,640 0.25 2,660,000 133,000 100,000 On August 1, 2019, the Company closed the second and final tranche of the non-brokered private placement, issuing 6,042,954 0.05 302,148 228,202 36,468 0.25 16,962,846 640,556 0.09 858,495 On August 23, 2019, the Company closed the first tranche of a non-brokered private placement, issuing 27,966,002 0.05 1,398,300 1,049,974 28,847 2,033,998 77,117 0.18 197,800 On August 30, 2019, the Company closed the second and final tranche of the non-brokered private placement, issuing 1,000,000 0.05 50,000 37,550 On February 26, 2020, the Company closed a non-brokered private placement, issuing 2,991,073 0.56 1,675,000 1,256,854 95,763 239,284 0.70 two years 696,428 300,000 On May 12, 2020, the Company closed a non-brokered private placement, issuing 107,143 0.56 60,000 44,671 During the year ended June 30, 2020, the Company issued 1,403,200 1,912,000 0.05 165,760 125,180 On August 14, 2020, the Company closed the first tranche of a brokered private placement of units of the Company (the “August 2020 Offering”), issuing 35,212,142 0.35 9,301,321 12,324,250 0.50 709,488 849,978 2,112,729 0.35 On August 25, 2020, the Company closed the second tranche of the August 2020 Offering, issuing 20,866,292 0.35 5,510,736 7,303,202 237,668 314,512 1,127,178 In the August 2020 Offering, the fair value of warrants, which are treated as a liability and fair value accounted for, were greater than gross proceeds. As a result, a loss of $ 940,290 947,156 Bunker Hill Mining Corp. Notes to Consolidated Financial Statements Six Months Ended December 31, 2020 and Years Ended June 30, 2020 and 2019 (Expressed in United States Dollars) 10. Capital stock, warrants and stock options (continued) Issued and outstanding (continued) The Company also issued 2,205,714 177,353 55,676 28,300 344,185 0.67 899,237 On October 9, 2020, the Company issued 5,572,980 0.49 1,600,000 500,000 23,376 For each financing, the Company has accounted for the warrants in accordance with ASC Topic 815. The warrants are considered derivative instruments as they were issued in a currency other than the Company’s functional currency of the U.S. dollar. The estimated fair value of warrants accounted for as liabilities was determined on the date of issue and marks to market at each financial reporting period. The change in fair value of the warrant is recorded in the consolidated statement of operations and comprehensive loss as a gain or loss and is estimated using the Binomial model. The fair value of the warrant liabilities related to the various tranches of warrants issued during the period were estimated using the Binomial model to determine the fair value using the following assumptions on the day of issuance and as at December 31, 2020: Schedule of Estimated Using the Binomial Model to Determine the Fair Value of Warrant Liabilities August 2020 issuance August 14, 2020 December 31, 2020 Expected life 1112 973 Volatility 100 % 100 % Risk free interest rate 1.53 % 1.31 % Dividend yield 0 % 0 % Share price $ 0.42 $ 0.41 Fair value $ 15,746,380 $ 14,493,215 Change in derivative liability $ 1,253,165 The warrant liabilities as a result of the December 2017, August 2018, November 2018, June 2019 and August 2019 private placements were revalued as at December 31, 2020 and June 30, 2020 using the Binomial model and the following assumptions: December 2017 issuance June 30, 2020 December 31, 2020 Expected life 166 Expired Volatility 100 % Risk free interest rate 0.69 % Dividend yield 0 % Share price $ 0.73 Fair value $ 0 $ 0 Change in derivative liability $ 0 Bunker Hill Mining Corp. Notes to Consolidated Financial Statements Six Months Ended December 31, 2020 and Years Ended June 30, 2020 and 2019 (Expressed in United States Dollars) 10. Capital stock, warrants and stock options (continued) Issued and outstanding (continued) August 2018 issuance June 30, 2020 December 31, 2020 Expected life 405 221 Volatility 100 % 100 % Risk free interest rate 1.20 % 1.23 % Dividend yield 0 % 0 % Share price $ 0.73 $ 0.41 Fair value $ 6,132 $ 0 Change in derivative liability $ 6,132 November 2018 issuance June 30, 2020 December 31, 2020 Expected life 516 332 Volatility 100 % 100 % Risk free interest rate 1.34 % 1.09 % Dividend yield 0 % 0 % Share price $ 0.73 $ 0.41 Fair value $ 206,253 $ 52,540 Change in derivative liability $ 153,713 June 2019 issuance (i) June 30, 2020 December 31, 2020 Expected life 363 1826 Volatility 100 % 100 % Risk free interest rate 1.15 % 0.85 % Dividend yield 0 % 0 % Share price $ 0.73 $ 0.41 Fair value $ 6,582,920 $ 3,438,839 Change in derivative liability $ 3,144,081 (i) During the six months ended December 31, 2020, the Company amended the exercise price to C$ 0.59 December 31, 2025 11,660,000 August 2019 issuance (ii) June 30, 2020 December 31, 2020 Expected life 397 213 1826 Volatility 100 % 100 % Risk free interest rate 1.11 % 0.81 % Dividend yield 0 % 0 % Share price $ 0.73 $ 0.41 Fair value $ 11,631,921 $ 5,922,270 Change in derivative liability $ 5,709,651 (ii) During the six months ended December 31, 2020, the Company amended the exercise price to C$ 0.59 December 31, 2025 17,920,000 2,752,900 Bunker Hill Mining Corp. Notes to Consolidated Financial Statements Six Months Ended December 31, 2020 and Years Ended June 30, 2020 and 2019 (Expressed in United States Dollars) 10. Capital stock, warrants and stock options (continued) Warrants Schedule of Warrant Activity Weighted Weighted average average Number of exercise price grant date warrants (C$) value ($) Balance, June 30, 2019 13,046,484 $ 0.88 $ 0.27 Issued 27,360,284 0.27 0.03 Expired (229,464 ) 8.50 3.54 Exercised (i) (2,332,900 ) 0.25 0.02 Balance, June 30, 2020 37,844,404 $ 0.43 $ 0.09 Issued 58,284,148 0.50 0.11 Expired (350,746 ) 14.84 5.63 Balance, December 31, 2020 95,777,806 $ 0.54 $ 0.08 (i) During the year ended June 30, 2020, 2,332,900 0.25 583,225 417,006 871,710 (ii) During the six months ended December 31, 2020, the Company amended the exercise price to C$ 0.59 3,315,200 210,839 Schedule of Warrants Outstanding Exercise Prices Number of Exercise Number of warrants Expiry date price (C$) warrants exercisable August 1, 2021 0.25 2,752,900 2,752,900 August 9, 2021 4.50 160,408 160,408 November 28, 2021 1.00 645,866 645,866 November 13, 2021 0.80 400,000 400,000 November 13, 2021 0.50 400,000 400,000 February 26, 2022 0.70 239,284 239,284 August 31, 2023 0.50 58,284,148 58,284,148 December 31, 2025 0.59 32,895,200 32,895,200 95,777,806 95,777,806 Bunker Hill Mining Corp. Notes to Consolidated Financial Statements Six Months Ended December 31, 2020 and Years Ended June 30, 2020 and 2019 (Expressed in United States Dollars) 10. Capital stock, warrants and stock options (continued) Broker options Schedule of Broker Options Weighted Number of average broker exercise price options (C$) Balance, June 30, 2019 and June 30, 2020 - $ - Issued - August 2020 Compensation Options 3,239,907 0.35 Balance, December 31, 2020 3,239,907 $ 0.35 (i) The grant date fair value of the August 2020 Compensation Options were estimated at $521,993 using the Black-Scholes valuation model with the following underlying assumptions: Schedule of Estimated Using Black-Scholes Valuation Model for Fair Value of Broker Options Risk free interest rate Dividend yield Volatility Stock price Weighted average life 0.31 % 0 % 100 % C$ 0.35 3 Schedule of Warrants Outstanding Broker Options Exercise Prices Exercise Number of Expiry date price (C$) broker options Fair value ($) August 31, 2023 0.35 3,239,907 521,993 (i) Exercisable into one August 2020 Unit Stock options The following table summarizes the stock option activity during the years ended December 31, 2020: Schedule of Stock Options Weighted average Number of exercise price stock options (C$) Balance, June 30, 2019 287,100 $ 7.50 Granted (i)(ii) 7,532,659 0.56 Forfeited (239,600 ) 9.78 Balance, June 30, 2020 7,580,159 $ 0.62 Granted (iii)(iv) 435,000 0.55 Balance, December 31, 2020 8,015,159 $ 0.62 (i) On October 24, 2019, 1,575,000 5 0.60 435,069 74,949 309,211 Bunker Hill Mining Corp. Notes to Consolidated Financial Statements Six Months Ended December 31, 2020 and Years Ended June 30, 2020 and 2019 (Expressed in United States Dollars) 10. Capital stock, warrants and stock options (continued) Stock options (continued) (ii) On April 20, 2020, 5,957,659 0.55 5 1,536,764 403,456 162,855 nil (iii) On September 30, 2020, 200,000 0.60 50 50 3 52,909 20,259 nil (iv) On October 30, 2020, 235,000 0.50 46,277 46,277 ni 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: Schedule of Estimated Using Black-Scholes Valuation Model for Fair Value of Stock Options Risk free interest rate Dividend yield Volatility Stock price Weighted average life (i) 1.54 % 0 % 100 % C$ 0.50 5 (ii) 0.44 % 0 % 100 % C$ 0.50 5 (iii) 0.25 % 0 % 100 % C$ 0.58 3 (iv) 0.26 % 0 % 100 % C$ 0.49 2.2 The following table reflects the actual stock options issued and outstanding as of December 31, 2020: Schedule of Stock Option Issued and Outstanding Weighted average Number of remaining Number of options Exercise contractual options vested Grant date price (C$) life (years) outstanding (exercisable) fair value ($) 10.00 1.33 47,500 47,500 258,013 0.50 2.00 235,000 235,000 46,277 0.60 2.75 200,000 - 52,909 0.60 3.82 1,575,000 975,000 435,069 0.55 4.30 5,957,659 - 1,536,764 8,015,159 1,257,500 2,329,032 Bunker Hill Mining Corp. Notes to Consolidated Financial Statements Six Months Ended December 31, 2020 and Years Ended June 30, 2020 and 2019 (Expressed in United States Dollars) | 9. Capital stock, warrants and stock options Authorized The total authorized capital is as follows: ● 750,000,000 0.000001 ● 10,000,000 0.000001 Issued and outstanding On February 26, 2020, the Company closed a non-brokered private placement, issuing 2,991,073 0.56 1,675,000 1,256,854 95,763 239,284 Each broker warrant entitles the holder to acquire one common share at a price of C$ 0.70 two years 696,428 300,000 During the nine months ended September 30, 2020, the Company issued 3,315,200 0.05 165,760 125,180 0.25 two years On May 12, 2020, the Company closed a non-brokered private placement, issuing 107,143 0.56 60,000 44,671 On August 14, 2020, the Company closed the first tranche of a brokered private placement of units of the Company (the “August 2020 Offering”), issuing 35,212,142 0.35 9,301,321 12,324,250 0.50 709,488 849,978 2,112,729 0.35 On August 25, 2020, the Company closed the second tranche of the August 2020 Offering, issuing 20,866,292 0.35 5,510,736 7,303,202 237,668 314,512 1,127,178 Bunker Hill Mining Corp. 9. Capital stock, warrants and stock options (continued) Issued and outstanding (continued) In the August 2020 Offering, the fair value of warrants, which are treated as a liability and fair value accounted for, were greater than gross proceeds. As a result, a loss of $ 940,290 947,156 The Company also issued 2,205,714 177,353 55,676 28,300 344,185 0.67 899,237 On October 9, 2020, the Company issued 5,572,980 0.49 1,600,000 500,000 23,376 In February 2021, the Company closed a non-brokered private placement of units of the Company (the “February 2021 Offering”), issuing 19,576,360 0.40 6,168,069 7,830,544 0.60 five years 159,397 351,000 0.40 The Company also issued 417,720 132,000 0.45 56,146 For each financing, the Company has accounted for the warrants in accordance with ASC Topic 815. The warrants are considered derivative instruments as they were issued in a currency other than the Company’s functional currency of the U.S. dollar. The estimated fair value of warrants accounted for as liabilities was determined on the date of issue and marks to market at each financial reporting period. The change in fair value of the warrant is recorded in the condensed interim consolidated statements of income (loss) and comprehensive income (loss) as a gain or loss and is estimated using the Binomial model. Bunker Hill Mining Corp. Notes to Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2021 (Expressed in United States Dollars) Unaudited 9. Capital stock, warrants and stock options (continued) Issued and outstanding (continued) The fair value of the warrant liabilities related to the various tranches of warrants issued during the period were estimated using the Binomial model to determine the fair value using the following assumptions on the day of issuance and as at September 30, 2021: Schedule of Estimated Using the Binomial Model to Determine the Fair Value of Warrant Liabilities February 2021 issuance February 9 and September 30, 2021 Expected life 1826 1593 Volatility 100 % 100 % Risk free interest rate 0.49 % 0.89 % Dividend yield 0 % 0 % Share price $ 0.27 0.29 $ 0.14 Fair value $ 3,813,103 $ 1,440,591 Change in derivative liability $ 2,372,512 The warrant liabilities as a result of the August 2018, November 2018, June 2019, August 2019, and August 2020 private placements were revalued as at September 30, 2021 and December 31, 2020 using the Binomial model and the following assumptions: August 2018 issuance December 31, 2020 September 30, 2021 Expected life 221 Expired Volatility 100 % Risk free interest rate 1.23 % Dividend yield 0 % Share price $ 0.41 $ Fair value $ nil $ nil Change in derivative liability $ nil November 2018 issuance December 31, 2020 September 30, 2021 Expected life 332 59 Volatility 100 % 100 % Risk free interest rate 1.09 % 0.92 % Dividend yield 0 % 0 % Share price $ 0.41 $ 0.14 Fair value $ 52,540 $ nil Change in derivative liability $ 52,540 Bunker Hill Mining Corp. Notes to Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2021 (Expressed in United States Dollars) Unaudited 9. Capital stock, warrants and stock options (continued) Issued and outstanding (continued) June 2019 issuance (i) December 31, 2020 September 30, 2021 Expected life 1826 1553 Volatility 100 % 100 % Risk free interest rate 0.85 % 0.84 % Dividend yield 0 % 0 % Share price $ 0.41 $ 0.14 Fair value $ 3,438,839 $ 837,368 Change in derivative liability $ 2,601,471 (i) In December 2020, the Company amended the exercise price to C$ 0.59 December 31, 2025 11,660,000 August 2019 issuance (ii) December 31, 2020 September 30, 2021 Expected life 213 1826 1553 Volatility 100 % 100 % Risk free interest rate 0.81 % 0.84 % Dividend yield 0 % 0 % Share price $ 0.41 $ 0.14 Fair value $ 5,922,270 $ 1,282,713 Change in derivative liability $ 4,639,557 (ii) In December 2020, the Company amended the exercise price to C$ 0.59 December 31, 2025 17,920,000 2,752,900 August 2020 issuance December 31, 2020 September 30, 2021 Expected life 973 700 Volatility 100 % 100 % Risk free interest rate 1.31 % 0.41 % Dividend yield 0 % 0 % Share price $ 0.41 $ 0.14 Fair value $ 14,493,215 $ 2,085,987 Change in derivative liability $ 12,407,228 Bunker Hill Mining Corp. Notes to Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2021 (Expressed in United States Dollars) Unaudited 9. Capital stock, warrants and stock options (continued) Warrants Schedule of Warrant Activity Number of Weighted average exercise price Weighted average grant date warrants (C$) value ($) Balance, December 31, 2019 36,452,284 $ 0.48 $ 0.16 Issued 62,238,632 0.49 0.26 Expired (346,178 ) 14.84 5.97 Exercised (i) (2,332,900 ) 0.25 0.02 Balance, September 30, 2020 96,011,838 $ 0.47 $ 0.20 Balance, December 31, 2020 95,777,806 $ 0.54 $ 0.16 Issued 19,994,080 0.6 0.19 Expired (2,913,308 ) 0.48 0.14 Balance, September 30, 2021 112,858,578 $ 0.55 $ 0.19 (i) During the nine months ended September 30, 2020, 2,332,900 0.25 583,225 417,006 871,710 Schedule of Warrants Outstanding Exercise Price Expiry date Exercise price (C$) Number of warrants Number of warrants exercisable November 13, 2021 0.80 400,000 400,000 November 13, 2021 0.50 400,000 400,000 November 28, 2021 1.00 645,866 645,866 February 26, 2022 0.70 239,284 239,284 August 31, 2023 0.50 58,284,148 58,284,148 December 31, 2025 0.59 32,895,200 32,895,200 February 9, 2026 0.60 17,112,500 17,112,500 February 16, 2026 0.60 2,881,580 2,881,580 112,858,578 112,858,578 Bunker Hill Mining Corp. Notes to Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2021 (Expressed in United States Dollars) Unaudited 9. Capital stock, warrants and stock options (continued) Broker options Schedule of Broker Options Number of Weighted average broker options exercise price (C$) Balance, December 31, 2019 - - Issued - August 2020 Compensation Options (i) 3,239,907 0.35 Balance, December 31, 2020 3,239,907 0.35 Issued - February 2021 Compensation Options 351,000 0.40 Balance, September 30, 2021 3,590,907 $ 0.35 (i) The grant date fair values of the August 2020 Compensation Options and February 2021 Compensation Options were estimated at $ 521,993 68,078 Schedule of Estimated Using Black-Scholes Valuation Model for Fair Value of Broker Options Grant Date Risk free interest rate Dividend yield Volatility Stock price Weighted average life August 2020 0.31 % 0 % 100 % C$0.35 3 years February 2021 0.26 % 0 % 100 % C$0.35 3 years Schedule of Warrants Outstanding Broker Option Exercise Prices Expiry date Exercise price (C$) Number of broker options Fair value ($) August 31, 2023 (i) 0.35 3,239,907 521,993 February 16, 2024 0.40 351,000 68,078 3,590,907 590,071 (i) Exercisable into one August 2020 Unit (ii) Exercisable into one February 2021 Unit Bunker Hill Mining Corp. Notes to Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2021 (Expressed in United States Dollars) Unaudited 9. Capital stock, warrants and stock options (continued) Stock options The following table summarizes the stock option activity during the periods ended September 30, 2021 and 2020: Schedule of Stock Options Number of stock options Weighted Average exercise price (C$) Balance, December 31, 2019 1,692,500 $ 1.27 Granted (i)(ii) 6,157,659 0.55 Forfeited (70,000 ) 10.38 Balance, September 30, 2020 7,780,159 $ 0.62 Balance, December 31, 2020 8,015,159 $ 0.62 Granted (iv) 1,037,977 0.34 Balance, September 30, 2021 9,053,136 $ 0.58 (i) On October 24, 2019, 1,575,000 5 0.60 435,069 10,430 48,189 45,173 186,614 (ii) On April 20, 2020, 5,957,659 0.55 5 1,536,764 104,890 427,034 201,728 357,409 (iii) On September 30, 2020, 200,000 0.60 50% 50% 3 52,909 6,596 32,652 218 218 (iv) On February 19, 2021, 1,037,977 273,271 764,706 5 0.335 204,213 43,941 160,750 nil Bunker Hill Mining Corp. Notes to Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2021 (Expressed in United States Dollars) Unaudited 9. Capital stock, warrants and stock options (continued) Stock options (continued) 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: Schedule of Estimated Using Black-Scholes Valuation Model for Fair Value of Stock Options Risk free interest rate Dividend yield Volatility Stock price Weighted average life (i) 1.54 % 0 % 100 % C$ 0.50 5 years (ii) 0.44 % 0 % 100 % C$ 0.50 5 years (iii) 0.25 % 0 % 100 % C$ 0.58 3 years (iv) 0.64 % 0 % 100 % C$ 0.34 5 years The following table reflects the actual stock options issued and outstanding as of September 30, 2021: Schedule of Stock Option Issued and Outstanding Exercise price (C$) Weighted average remaining contractual life (years) Number of options outstanding Number of options vested (exercisable) Grant date fair value ($) 10.00 0.59 47,500 47,500 258,013 0.50 1.25 235,000 235,000 46,277 0.60 2.00 200,000 200,000 52,909 0.60 3.07 1,575,000 1,275,000 435,069 0.55 3.56 5,957,659 1,489,415 1,536,764 0.335 4.39 1,037,977 273,271 204,213 9,053,136 3,520,186 2,533,245 Bunker Hill Mining Corp. Notes to Condensed Interim Consolidated Financial Statements Three and Nine Months Ended September 30, 2021 (Expressed in United States Dollars) Unaudited |