Annual report pursuant to Section 13 and 15(d)

SHARE CAPITAL

v3.24.1
SHARE CAPITAL
 12 Months Ended
Dec. 31, 2023
Equity [Abstract]  
SHARE CAPITAL

15. SHARE CAPITAL

 

  a) Authorized Share Capital

 

The Company is authorized to issue unlimited preferred shares with no par value and unlimited common shares with no par value.

 

  b) Issued Share Capital

 

During the year ended December 31, 2023, the Company issued shares for cash under its at-the market agreement (the “ATM”). In total 124,652 shares were issued for $1,092,915 less share issuance costs of $153,220.

 

On June 20, 2023 the Company entered in to a private placement agreement issuing 20,000 units of one common share and one whole Private Placement Warrant at a strike price of $25.00 with an expiry date of June 20, 2025 for total consideration of $250,000. The fair value of the Private Placement Warrants at initial recognition was $45,120.

 

On December 31, 2023, the Company owed $97,094 worth of stock-based compensation to Company officers (“Shares issued for compensation”). The balance issuable was classified as an Obligation to issue shares.

 

The Company had the following common share transactions during the year ended December 31, 2023:

 

    # of shares     Amount  
Shares issued for cash, net of share issuance costs     124,652     $ 939,695  
Shares issued in private placement     20,000       204,880  
Common shares issued for conversion of convertible debt     4,566,970       9,292,871  
Shares issued on conversion of vested prefunded warrants     141,175       11,576,224  
Shares issued for compensation     54,083       348,199  
Common shares issued to consultants     580,900       324,311  
Fractional shares issued due to roundup from reverse split     37,349       -  
Total common shares issued     5,525,129     $ 22,686,180  

 

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

 

    # of shares     Amount  
Common shares issued for bonuses and compensation     5,336     $ 520,230  
Common shares issued for conversion of convertible debt     1,351       131,532  
Common shares issued to consultants     5,695       853,457  
Total common shares issued     12,382     $ 1,505,219  

 

  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.

 

For the year ended December 31, 2023, the Company recorded aggregate share-based compensation expense of $317,933 (December 31, 2022 - $420,715) for all stock options on a straight-line basis over the vesting period.

 

 

As of December 31, 2023, 76,114 (December 31, 2022 – 27,652) options were outstanding at a weighted average exercise price of $41.75 (December 31, 2022 - $165.09), of which 26,300 (December 31, 2022 – 8,277) were exercisable.

 

The amounts recognized as share-based payments and stock options are included in share-based compensation in the Statement of Loss and Comprehensive Loss.

 

As of December 31, 2023, there was $116,646 (December 31, 2022 - $538,358) 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 1 year (December 31, 2022 – 2 years).

 

The following summarizes stock option activity during the years ended December 31, 2023 and 2022:

 

    Number of
Options		     Weighted
Average
Exercise Price		     Weighted
Average
Remaining Life
(years)		  
                   
Balance at December 31, 2021     14,338     $ 281.57       4.48  
Granted     14,942     $ 57.00       4.88  
Forfeited     (512 )   $ 350.00       -  
Cancelled     (1,116 )   $ 213.56       -  
Balance at December 31, 2022     27,652     $ 165.09       4.24  
Granted     57,364     $ 4.50       4.70  
Forfeited     (3,776 )   $ 133.66       -  
Cancelled     (5,126 )   $ 224.24       -  
Balance at December 31, 2023     76,114     $ 41.75       4.37  

 

The Company’s outstanding and exercisable stock options at December 31, 2023 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     1,844       2.50       179.57       1,844       179.57  
May 31, 2026     3,450       2.42       350.00       2,870       350.00  
July 15, 2026     1,109       2.54       350.00       828       350.00  
September 30, 2026     986       2.75       350.00       738       350.00  
November 18, 2027     11,361       3.88       57.00       5,676       57.00  
September 12, 2028     57,364       4.70       4.50       14,344       4.50  
Total Share Options     76,114       4.37       41.75       26,300       86.38  

 

 

The following table summarizes the Company’s weighted average assumptions used in the valuation of options granted during the year ended December 31, 2023 and December 31, 2022:

 

    December 31, 2023     December 31, 2022  
Expected volatility     77.46 %     78.05 %
Expected term (in years)     2.82       3.07  
Risk-free interest rate     3.97 %     3.35 %
Fair value of options   $ 2.31     $ 30.25  

 

  d) Warrants

 

The Company’s outstanding warrants as of December 31, 2023 were:

 

    Number of
warrants		     Weighted average
exercise price		     Expiry Date
              $      
Outstanding, December 31, 2021     115,407       333.09      
Granted June 30, 2022     82,129       122.10 a   December 30, 2025
Outstanding, December 31, 2022     197,536       245.37      
Granted January 17, 2023     53,226       62.00 a   July 17, 2026
Granted June 20, 2023     20,000       25.00     June 20, 2025
Granted October 18, 2023     620,230       2.62 a   April 18, 2027
Granted November 30, 2023     1,986,112       0.90     May 30, 2027
Outstanding, December 31, 2023     2,877,104       14.39      

 

(a) The issuance of the Fourth Tranche Debenture on November 30, 2023 triggered the down round provision, adjusting the exercise prices of the Debenture Warrants to $0.90 (Note 11). Subsequent to December 31, 2023, a Convertible Debt Investor purchased an additional tranche of $1,100,000 in convertible debentures (the “Fifth tranche”) and received 3,341,122 warrants (the “Fifth tranche of Debenture Warrants”). The convertible debt and warrants were issued with an exercise price of $0.214. The issuance of the additional tranche triggered the down round provision, adjusting the exercise prices of the First, Second, Third, and Fourth tranche of Debentures and the First, Second, Third, Fourth tranche of Debenture Warrants to $0.214.

 

  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, 2023 and 2022, 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, 2023     December 31, 2022  
Warrants     2,877,104       197,536  
Options     76,114       27,652  
Prefunded warrants     -       22,923  
Convertible debentures     13,444,835       99,730  
Total anti-dilutive weighted average shares     16,398,053       347,841