| SHARE CAPITAL |
| |
a) |
Authorized
Share Capital |
On
March 1, 2019, the Company changed its share structure with a Directors’ resolution to replace Class – A voting shares with
Common voting Shares, and to eliminate Class-B non-voting shares (where nil were issued), and created a new series of Preferred shares
with no par value and unlimited number of shares. Holders of Preferred shares shall be entitled to receive distribution ahead of holders
of Common shares. In addition, Preferred shareholders are also entitled to a fixed premium (if specifically provided in the special rights
and restrictions attached to a specific series of Preferred shares), prior to any distributions to holders of Common shares in the event
of dissolution, liquidation or winding-up of the Company.
The
Company had the following common share transactions during the year ended December 31, 2020:
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● |
On
May 2, 2020, the Company declared and issued 86,739 common shares at $3.37 (CAD $4.75) (412,008 common shares at $0.71 (CAD $1.00)
before the Reverse Split) as stock dividend to holders of Series A Preferred shares issued on May 2, 2019. |
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|
|
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● |
On
May 10, 2020, the Company declared and issued 48,791 common shares at $3.42 (CAD $4.75) (231,758 common shares at $0.72 (CAD $1.00)
before the Reverse Split) as stock dividend to holders of Series A Preferred shares issued on May 10, 2019. |
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|
|
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● |
On
November 2, 2020, the Company declared and issued 86,739 common shares at $3.56 (CAD $4.75) (412,008 common shares at $0.75 (CAD
$1.00) before the Reverse Split) as stock dividend to holders of Series A Preferred shares issued on May 2, 2019. |
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|
|
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● |
On
November 10, 2020, the Company declared and issued 48,791 common shares at $3.66 (CAD $4.75) (231,758 common shares at $0.77 (CAD
$1.00) before the Reverse Split) as stock dividend to holders of Series A Preferred shares issued on May 10, 2019. |
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|
|
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● |
During
the year ended December 31, 2020, 365,113 (1,734,285 before the Reverse Split) warrants were exercised at a price of CAD $2.38 (CAD
$0.50 before the Reverse Split). |
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|
|
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● |
At
various times during the year ended December 31, 2020, the Company issued 100,237 common shares (476,126 before the Reverse Split)
to various consultants for services rendered. |
The
Company had the following common share transactions during the year ended December 31, 2021:
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● |
On
March 29, 2021, the Company issued 30,000 common shares with a fair value of $179,700 against consulting services from a third party. |
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|
|
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● |
On
May 10, 2021, the Company declared, and on May 11, 2021 issued, 86,739 common shares as stock dividend to holders of Series A Preferred
shares issued on May 2, 2019. |
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|
|
| |
● |
On
May 10, 2021, the Company declared, and on May 11, 2021 issued, 48,791 common shares as stock dividend to holders of Series A Preferred
shares issued on May 10, 2019. |
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|
|
| |
● |
On
May 27, 2021, the Company issued to consultants a total of 7,237 common shares. |
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|
|
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● |
On
May 27, 2021, the Company issued 820,029 common shares as a result of 1,113,701 stock options exercised on a cashless basis at various
exercise prices. |
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● |
On
May 28, 2021, the Company’s officers opted to receive a total of 98,356 common shares as bonus compensation for services rendered
and accrued for in 2019 and 2020. |
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|
|
| |
● |
On
June 24, 2021, the Company issued to a consultant working with the senior secured debentures holders, a total of 10,000 common shares
on their behalf, for the term extension of the Bridge Loan (see Note 6). |
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|
| |
● |
On
July 12, 2021, the Company completed its IPO whereby it sold a total of 3,127,998 units, each consisting of one common share and
one Series A warrant to purchase one common share, at a public offering price of $5.00 for gross proceeds of $15,639,990. The Company
received net proceeds from the IPO of $14,388,791, after deducting underwriting discounts and commissions of 1,251,199. |
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● |
On
July 12, 2021, with the closing of the IPO, 2,258,826 common shares were issued upon the conversion of all of its issued and outstanding
Series A Preferred Shares. |
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● |
On
July 13, 2021, the Company declared and issued, 53,474 common shares as final stock dividend to the holders of Series A Preferred
shares. |
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|
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● |
On
July 13, 2021, the Company issued to consultants a total of 15,000 common shares. |
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|
|
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● |
On
July 15, 2021, the Company issued 39,800 common shares as a result of exercise of 39,800 Series A warrants on cash basis at an exercise
price of $6 per warrant. |
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|
|
| |
● |
On
July 28, 2021, 93,938 common stock purchase warrants were issued to the purchaser of the senior secured debentures, with a term of
three years and a strike price per share of $3.99. |
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|
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● |
On
September 01, 2021, the Company issued to Directors 19,992 common shares as settlement of accrued directors’ fee. |
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|
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● |
On
October 1, 2021, the company issued 36,379 common share as part of compensation to Company’s officers and executives. |
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|
|
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● |
On
October 1, 2021, the Company issued to a consultant 3,188 common shares against services. |
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|
|
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● |
On
October 27, 2021, the Company issued 36,275 common shares as a result of cashless exercise of 93,938 common stock purchase warrants
related to the senior secured debentures. |
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|
|
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● |
On
November 27, 2021, the Company issued 7,018 common shares on as a result of exercise of 7,018 stock options at an exercise price
of $1.30 (CAD $1.66). |
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|
|
| |
● |
On
December 31, 2021, the Company issued 35,979 common share as part of compensation to Company’s officers. |
The
Company has adopted a stock option plan (the “Plan”) for its directors, officers, employees and consultants to acquire common
shares of the Company. The terms and conditions of the stock options are determined by the Board of Directors.
On
May 28, 2019, at the Company’s annual general meeting, shareholders approved an amendment to the Stock Option Plan to increase
the number of authorized shares subject to the stock option plan to 15% of the issued and outstanding shares of the Company (including
any unconverted Series A Preferred Shares).
For
the year ended December 31, 2021, the Company recorded aggregate share-based compensation expense of $796,141 (December 31, 2020 - $571,210)
for all stock options on a straight-line basis over the vesting period.
As
of December 31, 2021, 717,019 (December 31, 2020 - 1,450,918) Stock Options were outstanding at a weighted average exercise price of
$5.63 (CAD 7.14) [December 31, 2020 - $2.01 (CAD 2.56)], of which 280,938 (December 31, 2020 - 1,161,726) were exercisable.
The
amounts recognized as share-based payments and stock options are included in share-based compensation on the Statement of Loss and Comprehensive
Loss.
As
of December 31, 2021, there was $634,626 (December 31, 2020 - $275,150) of total unrecognized compensation cost related to non-vested
share-based compensation arrangements granted under the stock option plan; that cost is expected to be recognized over a period of 3
years (December 31, 2020 – 2 years).
The
following summarizes stock option activity during the years ended December 31, 2021 and 2020:
SCHEDULE OF STOCK OPTION ACTIVITY
| |
|
Number of Options* |
|
|
Weighted Average Exercise Price* |
|
|
Weighted Average Remaining Life
(years) |
|
| |
|
|
|
|
|
|
|
|
|
| Balance at December 31, 2019 |
|
|
1,106,711 |
|
|
$ |
1.35 |
|
|
|
4.98 |
|
| Granted |
|
|
387,760 |
|
|
$ |
3.73 |
|
|
|
5.46 |
|
| Forfeited |
|
|
(25,132 |
) |
|
$ |
1.31 |
|
|
|
- |
|
| Cancelled |
|
|
(18,421 |
) |
|
$ |
1.31 |
|
|
|
- |
|
| Balance at December 31, 2020 |
|
|
1,450,918 |
|
|
$ |
2.01 |
|
|
|
4.38 |
|
| Granted |
|
|
509,788 |
|
|
$ |
7.00 |
|
|
|
4.47 |
|
| Exercised |
|
|
(1,120,719 |
) |
|
|
3.23 |
|
|
|
- |
|
| Forfeited |
|
|
(28,947 |
) |
|
$ |
4.75 |
|
|
|
- |
|
| Cancelled |
|
|
(94,021 |
) |
|
$ |
6.70 |
|
|
|
- |
|
| Balance at December 31, 2021 |
|
|
717,019 |
|
|
$ |
5.84 |
|
|
|
4.48 |
|
| * |
reflects the 1:4.75 reverse stock split effected on November 29, 2020. |
The
Company’s outstanding and exercisable stock options at December 31, 2021 were:
SCHEDULE OF OUTSTANDING AND EXERCISABLE STOCK OPTIONS
| |
|
Outstanding Options* |
|
|
Exercisable Options* |
|
| Expiry Date |
|
Number |
|
|
Weighted Average Remaining Life (years) |
|
|
Weighted Average Exercise Price |
|
|
Weighted Average Exercise Price |
|
|
Number |
|
|
Weighted Average Exercise Price |
|
| |
|
|
|
|
|
|
|
|
|
|
CAD
$ |
|
|
|
$ |
|
|
|
|
|
|
|
$ |
|
| January 31, 2026 |
|
|
921 |
|
|
|
4.09 |
|
|
|
4.75 |
|
|
|
3.75 |
|
|
|
921 |
|
|
|
3.75 |
|
| June 30, 2026 |
|
|
255,594 |
|
|
|
4.50 |
|
|
|
4.75 |
|
|
|
3.75 |
|
|
|
211,993 |
|
|
|
3.75 |
|
| May 31, 2026 |
|
|
355,775 |
|
|
|
4.42 |
|
|
|
8.87 |
|
|
|
7.00 |
|
|
|
59,296 |
|
|
|
7.00 |
|
| July 15, 2026 |
|
|
55,445 |
|
|
|
4.54 |
|
|
|
8.87 |
|
|
|
7.00 |
|
|
|
4,620 |
|
|
|
7.00 |
|
| September 30, 2026 |
|
|
49,284 |
|
|
|
4.75 |
|
|
|
8.87 |
|
|
|
7.00 |
|
|
|
4,108 |
|
|
|
7.00 |
|
| Total Share Options |
|
|
717,019 |
|
|
|
4.48 |
|
|
|
7.40 |
|
|
|
5.84 |
|
|
|
280,938 |
|
|
|
4.53 |
|
| * |
reflects the 1:4.75 reverse stock split effected on November 29, 2020. |
Stock-based
compensation expense recognized is based on options expected to vest, the fair value of each employee option grant during the years ended
December 31, 2021 and 2020 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted
average assumptions:
SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS
| |
|
December 31, 2021 |
|
|
December 31, 2020 |
|
| Expected volatility |
|
|
80.00 |
% |
|
|
79.60 |
% |
| Expected term (in years) |
|
|
3.31 |
|
|
|
3.44 |
|
| Risk-free interest rate |
|
|
0.92 |
% |
|
|
0.45 |
% |
| Fair value of options |
|
$ |
2.59 |
|
|
$ |
1.90 |
|
The
Company’s outstanding warrants as of December 31, 2021 were:
SCHEDULE OF OUTSTANDING WARRANTS
| |
|
Number of warrants* |
|
|
Weighted average exercise price* |
|
|
Weighted average exercise price* |
|
|
Expiry Date |
| |
|
|
|
|
|
|
CAD |
|
|
|
$ |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Outstanding, December 31, 2019 |
|
|
3,398,996 |
|
|
|
7.70 |
|
|
|
6.05 |
|
|
|
| Exercised during quarter 4, 2020 |
|
|
(365,112 |
) |
|
|
2.38 |
|
|
|
1.87 |
|
|
December 21, 2021** |
| Expired during quarter 4, 2020 |
|
|
(63,157 |
) |
|
|
2.38 |
|
|
|
1.87 |
|
|
October 15, 2021** |
| Expired during quarter 4, 2020 |
|
|
(163,610 |
) |
|
|
2.38 |
|
|
|
1.87 |
|
|
December 21, 2021** |
| Expired during quarter 4, 2020 |
|
|
(33,684 |
) |
|
|
1.66 |
|
|
|
1.30 |
|
|
December 31, 2021** |
| Expired during quarter 4, 2020 |
|
|
(210,526 |
) |
|
|
2.38 |
|
|
|
1.87 |
|
|
January 16, 2022** |
| Expired during quarter 4, 2020 |
|
|
(16,842 |
) |
|
|
1.66 |
|
|
|
1.30 |
|
|
January 21, 2022** |
| Outstanding, December 31, 2020 |
|
|
2,546,065 |
|
|
|
9.50 |
|
|
|
7.46 |
|
|
|
| Granted during quarter 3, 2021 |
|
|
3,263,997 |
|
|
|
7.48 |
|
|
|
6.00 |
|
|
July 12, 2024 |
| Granted during quarter 3, 2021 |
|
|
93,938 |
|
|
|
4.98 |
|
|
|
3.99 |
|
|
July 28, 2024 |
| Exercised during quarter 3, 2021 |
|
|
(39,800 |
) |
|
|
7.48 |
|
|
|
6.00 |
|
|
July 12, 2024 |
| Exercised during quarter 4, 2021 |
|
|
(93,938 |
) |
|
|
4.98 |
|
|
|
3.99 |
|
|
July 28, 2024 |
| Outstanding, December 31, 2021 |
|
|
5,770,262 |
|
|
|
7.49 |
|
|
|
5.91 |
|
|
|
| * |
|
reflects the
1:4.75 reverse stock split effected on November 29, 2020. |
| ** |
|
pursuant to
the terms of the warrants, the warrants were accelerated to expire on October 10, 2020 due to |
occurrence
of an acceleration event. Accordingly, any unexercised warrants were terminated.
| ** |
|
pursuant to the terms of the warrants, the warrants were accelerated to expire on October
10, 2020 due to occurrence of an acceleration event. Accordingly, any unexercised warrants were terminated. |
|