13. DERIVATIVE FINANCIAL INSTRUMENTS 

Certain promissory notes were issued with detachable warrants and embedded derivatives which contained terms that did not achieve equity classification.

The following tables summarize the components of the Company’s derivative liabilities and linked common shares as of May 31, 2024 and August 31, 2023 and the amounts that were reflected in income related to derivatives for the period ended:

The following table summarizes the effects on the Company’s gain (loss) associated with changes in the fair values of the derivative financial instruments by type of financing for the three and nine months ended May 31, 2024:

The Company utilized the Black Scholes Merton (“BSM”) technique for the warrant derivatives. The significant assumptions utilized in the BSM is risk-free interest, volatility, time to expiration, strike price and underlying price.

Significant inputs and results arising from the BSM calculations are as follows for the warrant derivatives classified in liabilities:

The Company utilized the Binomial Lattice Model technique for the redemption feature derivatives. The significant assumptions utilized in the lattice model is risk-free interest, volatility, time to expiration, strike price and underlying price.

Significant inputs and results arising from the lattice calculations are as follows for the warrant derivatives classified in liabilities:

The following table reflects the issuances of embedded derivatives and changes in fair value inputs and assumptions related to the embedded derivatives as of May 31, 2024.