Annual report pursuant to Section 13 and 15(d)

SHARE CAPITAL

v3.22.4
SHARE CAPITAL
 12 Months Ended
Dec. 31, 2022
Equity [Abstract]  
SHARE CAPITAL

12. SHARE CAPITAL

 

  a) Authorized Share Capital 

 

On March 1, 2019, the Company changed its share structure to replace Class – A voting shares with Common voting Shares, eliminated Class-B non-voting shares, 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.

 

  b) Issued Share Capital

 

The Company had the following common share transactions during the year ended December 31, 2022:

 SCHEDULE OF SHARE CAPITAL

    # of shares     Amount  
Common shares issued for bonuses and compensation     266,765     $ 520,230  
Common shares issued for conversion of convertible debt     67,568       131,532  
Common shares issued to consultants     284,767       853,457  
Total common shares issued     619,100     $ 1,505,219  

 

The Company had the following common share transactions during the year ended December 31, 2021:

 

    # of shares     Amount  
Common shares issued for cash     3,127,998     $ 13,262,712  
Common shares issued for conversion of series A preferred stock     2,258,826       6,717,873  
Common shares issued on exercise of warrants     39,800       238,800  
Common shares issued on cashless exercise of warrants     36,275       -  
Common shares issued on exercise of options     7,018       9,123  
Common shares issued on cashless exercise of options     820,029       -  
Common shares issued for bonus and compensation     159,775       648,449  
Common shares issued for consulting services     76,364       381,663  
Common shares issued for settlement of accrued director’s fee     19,992       46,783  
Common shares issued for dividend on preferred shares     189,004       735,932  
Share issue costs     -       (2,099,842 )
Total common shares issued     6,735,081     $ 19,941,493  

 

  c) Stock Options

 

The Company has adopted a stock option plan (the “Option 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 Option Plan to increase the number of authorized shares subject to the 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, 2022, the Company recorded aggregate share-based compensation expense of $420,715 (December 31, 2021 - $796,141) for all stock options on a straight-line basis over the vesting period.

 

 

As of December 31, 2022, 1,382,629 (December 31, 2021 – 717,019) Options were outstanding at a weighted average exercise price of $3.30 (December 31, 2021 - $5.63), of which 414,305 (December 31, 2021 – 280,938) 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, 2022, there was $538,358 (December 31, 2021 - $634,626) of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted; that cost is expected to be recognized over a period of 2 years (December 31, 2021 – 3 years).

 

The following summarizes stock option activity during the years ended December 31, 2022 and 2021:

 

    Number of Options     Weighted Average Exercise Price     Weighted Average Remaining Life (years)  
                   
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     $ 5.63       4.48  
Granted     747,060     $ 1.14       4.48  
Forfeited     (25,542 )   $ 7.00       -  
Cancelled     (55,908 )   $ 4.27       -  
Balance at December 31, 2022     1,382,629     $ 3.30       4.24  

 

The Company’s outstanding and exercisable stock options at December 31, 2022 were:

 

    Outstanding Options     Exercisable Options  
Expiry Date   Number     Weighted Average Remaining Life (years)     Weighted Average Exercise Price     Number     Weighted Average Exercise Price  
                $           $  
June 30, 2026     210,489       3.50       3.51       210,489       3.51  
May 31, 2026     320,351       3.42       7.00       160,176       7.00  
July 15, 2026     55,445       3.54       7.00       23,100       7.00  
September 30, 2026     49,284       3.75       7.00       20,540       7.00  
November 18, 2027     747,060       4.88       1.14       -       -  
Total Share Options     1,382,629       4.24       3.30       414,305       5.23  

 

 

The following table summarizes the Company’s assumptions used in the valuation of options granted during the year ended December 31, 2022 and December 31, 2021:

 

    December 31, 2022     December 31, 2021  
Expected volatility     78.05 %     80.00 %
Expected term (in years)     3.07       3.31  
Risk-free interest rate     3.35 %     0.92 %
Fair value of options   $ 0.60     $ 2.59  

 

  d) Warrants

 

The Company’s outstanding warrants as of December 31, 2022 were:

 

    Number of warrants     Weighted average exercise price     Expiry Date
          $      
Outstanding, December 31, 2020     2,546,065       7.46      
Granted July 12, 2021     3,263,997       6.00     July 12, 2024
Granted July 28, 2021     93,938       3.99     July 28, 2024
Exercised in 2021     (133,738 )     4.59     n/a
Outstanding, December 31, 2021     5,770,262       5.91      
Granted June 30, 2022     4,106,418       2.44 a   December 30, 2025
Outstanding, December 31, 2022     9,876,680       4.91      

 

(a) Subsequent to the year end, the issuance of additional tranches of Debentures triggered the down round provision, adjusting the exercise prices of the Debenture Warrants to $1.24 (Note 9).

 

  e) Loss per Common Share

 

Diluted net loss attributable to common shareholders per share does not differ from basic net loss attributable to common shareholders per share for the years ended December 31, 2022 and December 31, 2021, since the effect of the Company’s warrants, stock options and convertible debentures are anti-dilutive.

 

Potentially dilutive securities that are not included in the calculation of diluted net loss per share because their effect is anti-dilutive are as follows (in common equivalent shares):

                 
   

December 31, 2022

    

December 31, 2021

  
Warrants     9,876,680       5,770,262  
Options     1,382,629       717,019  
Prefunded warrants     1,146,132       -  
Convertible debentures     4,986,486       -  
Total anti-dilutive weighted average shares     17,391,927       6,487,281