Capital Stock, Warrants and Stock Options | 9. Capital Stock, Warrants and Stock Options Authorized The total authorized capital is as follows: ● An increase to 1,500,000,000 0.000001 ● 10,000,000 0.000001 Issued and outstanding 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 154,630 351,000 0.40 Bunker Hill Mining Corp. Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Three and Nine Months Ended September 30, 2022 (Expressed in United States Dollars) The Company also issued 417,720 132,000 0.45 56,146 In April 2022, the Company closed a private placement of 37,849,325 1,471,664 9,384,622 11,796,297 4,809,160 The Special Warrants were issued at a price of C$ 0.30 0.37 On May 31, 2022, the Company announced that it had received a receipt from the Ontario Securities Commission for its final short-form Canadian prospectus qualifying the distribution of the common stock of the Company and common stock purchase warrants of the Company issuable upon exercise of the special warrants of the Company that were issued on April 1, 2022. The Company also announced that it received notice from the United States Securities and Exchange Commission that its Form S-1 has been declared effective as of May 27, 2022. As a result of obtaining the receipt for the Canadian prospectus and the declaration of effectiveness for the Form S-1, each unexercised Special Warrant was automatically exercised into one Common Share and one Warrant without further action on the part of the holders. The non-brokered 1,471,664 0.30 0.37 In connection with the special warrants offering, the agents earned a cash commission in the amount of C$563,968 and compensation options exercisable to acquire an aggregate of 1,879,892 0.30 0.37 In April 2022, the Company issued 1,315,856 In May 2022, the Company issued 10,416,667 0.245 0.37 In June 2022, the Company issued 1,218,000 0.37 In July 2022, the Company issued 1,975,482 Bunker Hill Mining Corp. Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Three and Nine Months Ended September 30, 2022 (Expressed in United States Dollars) For each financing, the Company has accounted for the warrants in accordance with ASC Topic 815. The warrants are considered derivative instruments as they were issued in a currency other than the Company’s functional currency of the U.S. dollar. The estimated fair value of warrants accounted for as liabilities was determined on the date of issue and marks to market at each financial reporting period. The change in fair value of the warrant is recorded in the unaudited condensed interim consolidated statements of income and comprehensive income as a gain or loss and is estimated using the Binomial model. The warrant liabilities as a result of the June 2019, August 2019, August 2020, February 2021, April 2022 special warrants, April 2022 non-brokered, May 2022 Teck purchase, and June 2022 contractor private placements were revalued as at September 30, 2022, issuance date in 2022, and December 31, 2021 using the Binomial model and the following assumptions: Schedule of Estimated Using the Binomial Model to Determine the Fair Value of Warrant Liabilities April 2022 special warrants issuance September 30, April 1, Expected life 914 1,096 Volatility 120 % 120 % Risk free interest rate 3.72 % 2.35 % Dividend yield 0 % 0 % Share price (C$) $ 0.115 $ 0.29 Fair value $ 1,488,348 $ 5,947,232 Change in derivative liability $ (4,458,884 ) $ - April 2022 non-brokered issuance September 30, April 1, Expected life 914 1,096 Volatility 120 % 120 % Risk free interest rate 3.72 % 2.35 % Dividend yield 0 % 0 % Share price (C$) $ 0.115 $ 0.29 Fair value $ 57,869 $ 186,190 Change in derivative liability $ (128,321 ) $ - May 2022 Teck issuance September 30, May 13, Expected life 956 1,096 Volatility 120 % 120 % Risk free interest rate 3.72 % 2.68 % Dividend yield 0 % 0 % Share price (C$) $ 0.115 $ 0.25 Fair value $ 424,053 $ 1,273,032 Change in derivative liability $ (848,979 ) $ - June 2022 issuance September 30, June 30, Expected life 914 1,006 Volatility 120 % 120 % Risk free interest rate 3.72 % 3.14 % Dividend yield 0 % 0 % Share price (C$) $ 0.115 $ 0.20 Fair value $ 47,895 $ 113,425 Change in derivative liability $ (65,530 ) $ - Bunker Hill Mining Corp. Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Three and Nine Months Ended September 30, 2022 (Expressed in United States Dollars) February 2021 issuance September 30, December 31, Expected life 1,228 1,501 Volatility 120 % 100 % Risk free interest rate 3.72 % 1.25 % Dividend yield 0 % 0 % Share price (C$) $ 0.115 $ 0.37 Fair value $ 829,987 $ 3,483,745 Change in derivative liability $ (2,653,758 ) $ (329,358 ) August 2020 issuance September 30, December 31, Expected life 335 608 Volatility 120 % 100 % Risk free interest rate 3.79 % 0.95 % Dividend yield 0 % 0 % Share price (C$) $ 0.115 $ 0.37 Fair value $ 484,745 $ 6,790,163 Change in derivative liability $ (6,305,419 ) $ (7,703,052) June 2019 issuance (i) September 30, December 31, Expected life 1,188 1,461 Volatility 120 % 100 % Risk free interest rate 3.72 % 1.02 % Dividend yield 0 % 0 % Share price (C$) $ 0.115 $ 0.37 Fair value $ 460,207 $ 2,067,493 Change in derivative liability $ (1,607,286 ) $ (1,371,346) (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) September 30, December 31, Expected life 1,188 1,461 Volatility 120 % 100 % Risk free interest rate 3.72 % 1.02 % Dividend yield 0 % 0 % Share price (C$) $ 0.115 $ 0.37 Fair value $ 707,282 $ 3,177,485 Change in derivative liability $ (2,470,203 ) $ (2,744,785) (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 Warrants Schedule of Warrant Activity Weighted Weighted average average Number of exercise price grant date warrants (C$) value ($) Balance, December 31, 2020 95,777,806 $ 0.54 $ 0.08 Issued 19,994,080 0.60 0.19 Expired (2,913,308 ) 0.48 0.14 Balance, September 30, 2021 112,858,578 $ 0.55 $ 0.19 Balance, December 31, 2021 111,412,712 $ 0.54 $ 0.18 Issued 50,955,636 0.37 0.15 Expired (239,284 ) 0.70 0.21 Balance, September 30, 2022 162,129,064 $ 0.49 $ 0.17 During the nine months ended September 30, 2022, 239,284 Bunker Hill Mining Corp. Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Three and Nine Months Ended September 30, 2022 (Expressed in United States Dollars) At September 30, 2022, the following warrants were outstanding: Schedule of Warrants Outstanding Exercise Price Number of Exercise Number of warrants Expiry date price (C$) warrants exercisable August 31, 2023 0.50 58,284,148 58,284,148 December 31, 2025 0.59 32,895,200 32,895,200 February 9, 2026 0.60 17,112,500 17,112,500 February 16, 2026 0.60 2,881,580 2,881,580 April 1, 2025 0.37 40,358,969 40,358,969 May 13, 2025 0.37 10,416,667 10,416,667 162,129,064 162,129,064 Compensation options At September 30, 2022, the following compensation options were outstanding: Schedule of Compensation Options Weighted Number of average compensation exercise price options (C$) Issued - August 2020 Compensation Options 3,239,907 $ 0.35 Balance, December 31, 2020 3,239,907 0.35 Issued – February 2021 Compensation Options 351,000 0.35 Balance, December 31, 2021 3,590,907 0.35 Issued – April 2022 Compensation Options 1,879,892 0.30 Balance, September 30, 2022 5,470,799 $ 0.34 The grant date fair value of the August 2020 and February 2021, and April 2022 Compensation Options were estimated at $ 521,993 68,078 264,435 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 February 2021 0.26 % 0 % 100 % C$ 0.40 3 April 2022 2.34 % 0 % 100 % C$ 0.30 2 Schedule of Broker Exercise Prices Exercise Number of Fair value Expiry date price (C$) broker options ($) August 31, 2023 (i) $ 0.35 3,239,907 $ 521,993 February 16, 2024 (ii) $ 0.40 351,000 $ 68,078 April 1, 2024 (iii) $ 0.30 1,879,892 $ 264,435 5,470,799 $ 854,506 (i) Exercisable into one August 2020 Unit (ii) Exercisable into one February 2021 Unit (iii) Exercisable into one April 2022 Unit Bunker Hill Mining Corp. Notes to the Condensed Interim Consolidated Financial Statements (Unaudited) Three and Nine Months Ended September 30, 2022 (Expressed in United States Dollars) Stock options The following table summarizes the stock option activity during the nine months ended September 30, 2022: Schedule of Stock Options Weighted average Number of exercise price stock options (C$) Balance, December 31, 2020 8,015,159 $ 0.62 Granted (i) 1,037,977 0.34 Balance, December 31, 2021 9,053,136 $ 0.58 Granted (ii) 300,000 0.15 Expired May 01, 2022 (47,500 ) Balance, September 30, 2022 9,305,636 $ 0.52 (i) On February 19, 2021, 1,037,977 273,271 764,706 5 0.335 204,213 43,941 160,750 (ii) On August 24, 2022, 300,000 150,000 5 0.15 28,930 14,465 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) 0.64 % 0 % 100 % C$ 0.34 5 (ii) On August 24, 2022, 300,000 150,000 150,000 5 0.15 28,930 14,465 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: Risk free interest rate Dividend yield Volatility Stock price Weighted average life (ii) 3.27 % 0 % 120 % C$ 0.15 5 The following table reflects the actual stock options issued and outstanding as of September 30, 2022: Schedule of Actual Stock Options Issued and Outstanding Number of remaining Number of options Exercise contractual options vested Grant date price (C$) life (years) outstanding (exercisable) fair value ($) 0.50 0.5 235,000 235,000 46,277 0.60 1.25 200,000 200,000 52,909 0.60 2.35 1,575,000 1,575,000 435,069 0.55 2.81 5,957,659 1,489,415 1,536,764 0.335 3.64 1,037,977 1,037,977 204,213 0.15 4.90 300,000 150,000 28,930 9,305,636 4,687,392 $ 2,304,162 | 10. Capital stock, warrants and stock options 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 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 Year Ended December 31, 2021, Six Months Ended December 31, 2020 and Year Ended June 30, 2020 (Expressed in United States Dollars) 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 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 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 154,630 351,000 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 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, 2021: Bunker Hill Mining Corp. Notes to Consolidated Financial Statements Year Ended December 31, 2021, Six Months Ended December 31, 2020 and Year Ended June 30, 2020 (Expressed in United States Dollars) Schedule of Estimated Using the Binomial Model to Determine the Fair Value of Warrant Liabilities February 2021 issuance February 9 and 16 2021 December 31, 2021 Expected life 1,826 1,501 Volatility 100 % 100 % Risk free interest rate 0.49 % 1.25 % Dividend yield 0 % 0 % Share price $ 0.27 0.29 $ 0.37 Fair value $ 3,813,103 $ 3,483,745 Change in derivative liability $ (329,358 ) 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 December 31, 2021 and December 31, 2020 using the Binomial model and the following assumptions: August 2020 issuance December 31, 2020 December 31, 2021 Expected life 973 608 Volatility 100 % 100 % Risk free interest rate 1.31 % 0.95 % Dividend yield 0 % 0 % Share price $ 0.41 $ 0.37 Fair value $ 14,493,215 $ 6,790,163 Change in derivative liability $ (7,703,052 ) August 2018 issuance December 31, 2020 December 31, 2021 Expected life 221 expired Volatility 100 % Nil % Risk free interest rate 1.23 % Nil % Dividend yield 0 % Nil % Share price $ 0.41 $ Nil Fair value $ 0 $ Nil Change in derivative liability $ Nil November 2018 issuance December 31, 2020 December 31, 2021 Expected life 332 expired Volatility 100 % Nil % Risk free interest rate 1.09 % Nil % Dividend yield 0 % Nil % Share price $ 0.41 $ Nil Fair value $ 52,540 $ Nil Change in derivative liability $ (52,540 ) June 2019 issuance (i) December 31, 2020 December 31, 2021 Expected life 1,826 1,461 Volatility 100 % 100 % Risk free interest rate 0.85 % 1.02 % Dividend yield 0 % 0 % Share price $ 0.41 $ 0.37 Fair value $ 3,438,839 $ 2,067,493 Change in derivative liability $ (1,371,346 ) (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 Bunker Hill Mining Corp. Notes to Consolidated Financial Statements Year Ended December 31, 2021, Six Months Ended December 31, 2020 and Year Ended June 30, 2020 (Expressed in United States Dollars) August 2019 issuance (ii) December 31, 2020 December 31, 2021 Expected life 213 1,826 1,461 Volatility 100 % 100 % Risk free interest rate 0.81 % 1.02 % Dividend yield 0 % 0 % Share price $ 0.41 $ 0.37 Fair value $ 5,922,270 $ 3,177,485 Change in derivative liability $ (2,744,785 ) (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 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 $ 0.28 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 $ 0.10 Issued 58,284,148 0.50 0.27 Expired (350,746 ) 14.84 5.97 Balance, December 31, 2020 95,777,806 $ 0.54 $ 0.18 Issued 19,994,080 0.60 0.19 Expired (4,359,174 ) 0.59 0.19 Balance, December 31, 2021 111,412,712 $ 0.54 $ 0.18 (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 December 31, 2025 3,315,200 210,839 At December 31, 2021, the following warrants were outstanding: Schedule of Warrants Outstanding Exercise Price Number of Exercise Number of warrants Expiry date price (C$) warrants exercisable February 26, 2022 0.70 239,284 239,284 August 31, 2023 0.50 58,284,148 58,284,148 December 31, 2025 0.59 32,895,200 32,895,200 February 9, 2026 0.60 17,112,500 17,112,500 February 16, 2026 0.60 2,881,580 2,881,580 111,412,712 111,412,712 During the year ended December 31, 2021, 160,408 2,752,900 645,866 400,000 400,000 Bunker Hill Mining Corp. Notes to Consolidated Financial Statements Year Ended December 31, 2021, Six Months Ended December 31, 2020 and Year Ended June 30, 2020 (Expressed in United States Dollars) Broker options At December 31, 2021, the following broker options were outstanding: Schedule of Broker Options Weighted Number of average broker exercise price options (C$) Balance, June 30, 2020 - $ - Issued - August 2020 Compensation Options 3,239,907 0.35 Balance, December 31, 2020 3,239,907 $ 0.35 Issued – February 2021 Compensation Options 351,000 0.40 Balance, December 31, 2021 3,590,907 0.35 (i) The grant date fair value of the August 2020 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 February 2021 0.26 % 0 % 100 % C$ 0.40 3 Schedule of Warrants Outstanding Broker Option Exercise Prices Exercise Number of Expiry date price (C$) broker options Fair value ($) August 31, 2023 (i) $ 0.35 3,239,907 $ 521,993 February 16, 2024 (ii) $ 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 Stock options The following table summarizes the stock option activity during the year ended December 31, 2021, the six months ended December 31, 2020 and the year ended June 30, 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 Granted (v) 1,037,977 0.34 Balance, December 31, 2021 9,053,136 $ 0.58 (i) On October 24, 2019, 1,575,000 5 0.60 435,069 50,909 74,949 309,211 Bunker Hill Mining Corp. Notes to Consolidated Financial Statements Year Ended December 31, 2021, Six Months Ended December 31, 2020 and Year Ended June 30, 2020 (Expressed in United States Dollars) (ii) On April 20, 2020, 5,957,659 0.55 5 1,536,764 531,925 403,456 162,855 (iii) On September 30, 2020, 200,000 0.60 50 50 3 52,909 32,651 20,259 nil (iv) On October 30, 2020, 235,000 0.50 December 31, 2022 46,277 46,277 (v) On February 19, 2021, 1,037,977 stock options were issued to an officer of the Company, of which 273,271 stock options vested immediately and the balance of 764,706 stock options vested on December 31, 2021. These options have a 5 -year life and are exercisable at C$ 0.335 per common share. The grant date fair value of the options was estimated at $ 204,213 . The vesting of these options resulted in stock-based compensation of $ 204,213 for the year ended December 31, 2021, which is included in operation and administration expenses on the consolidated statements of income (loss) and comprehensive income (loss). 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 (v) 0.64 % 0 % 100 % C$ 0.34 5 The following table reflects the actual stock options issued and outstanding as of December 31, 2021: 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 0.00 47,500 47,500 $ 258,013 0.50 0.03 235,000 235,000 46,277 0.60 0.04 200,000 200,000 52,909 0.60 0.49 1,575,000 1,575,000 435,069 0.55 2.17 5,957,659 1,489,415 1,536,764 0.335 0.47 1,037,977 1,037,977 204,213 9,053,136 4,584,892 $ 2,533,245 Bunker Hill Mining Corp. Notes to Consolidated Financial Statements Year Ended December 31, 2021, Six Months Ended December 31, 2020 and Year Ended June 30, 2020 (Expressed in United States Dollars) |