| SHARE CAPITAL AND RESERVES |
|
13. |
SHARE
CAPITAL AND RESERVES |
|
a) |
Authorized
share capital |
We
are authorized to issue an unlimited number of Class A Shares. The Class A Shares do not have any special rights or restrictions attached.
As of June 30, 2022, there were 5,057 Class A Shares issued and outstanding.
During
the six-month period ended June 30, 2022, the Company:
|
i) |
Issued,
4,375,000 units at a price of $1.60 per unit per unit for total proceeds of $7,000,000. Each unit consisted of one common share and one
warrant, to purchase one common share at $1.92 per share until February 28, 2027. In connection with the offering, the Company incurred
$900,720 in issuance costs as part of the transaction. |
|
ii) |
Issued,
171,608 shares, which were converted from Versus Holdco shares. |
|
iii) |
Issued,
590,625 shares at a price of $1.48 per unit for total proceeds of $874,125 as a result of the underwriter exercising the overallotment. |
|
iv) |
Issued
62,936 shares at a price of $0.70 to the Chief Innovation Officer of the Company in connection with the commitment to issue shares from
the acquisition of Xcite Interactive, Inc. |
During
the year ended December 31, 2021, the Company:
|
i) |
Issued
1,506,903 units at a price of $6.76 per unit in connection with the acquisition of Xcite. |
|
ii) |
issued,
1,472,000 units at a price of $7.50 per unit per unit for total proceeds of $11,040,000. Each unit consisted of one common share, one
Unit A warrant and one Unit B warrant. Unit A warrants allow the purchaser to purchase one common share at $7.50 per share until January
20, 2026. Unit B warrants allow the
purchaser to purchase one common share at $7.50 per share until January 20, 2026. In connection with the offering, the Company incurred
$1,524,439 in issuance costs as part of the transaction. |
|
iii) |
issued,
1,553,372 common shares pursuant to exercise of 1,435,333 warrants and 118,039 stock options for total proceeds of $6,735,254. |
|
iv) |
issued,
215,341 units consisting of one share of common share and one Unit A warrant and one Unit B warrant in exchange for the forgiveness of
$1,615,058 of debt and accrued interest. |
|
v) |
issued
29,307 shares of the Company’s common stock with a value of $206,614 to a third party in exchange for services (included in professional
fees). |
Escrow
At
June 30, 2022, 313 common shares (December 31, 2021 – 313) of the Company are held in escrow due to misplaced share certificates
originally issued to three individual shareholders.
The
Company may grant incentive stock options to its officers, directors, employees, and consultants. The Company has implemented a rolling
Stock Option Plan (the “Plan”) whereby the Company can issue up to 10% of the issued and outstanding common shares of the
Company. Options have a maximum term of ten years and vesting is determined by the Board of Directors.
A
continuity schedule of outstanding stock options is as follows:
| |
|
Number Outstanding |
|
|
Weighted Average Exercise Price |
|
| |
|
|
|
|
($) |
|
| Balance – December 31, 2020 |
|
|
1,353,831 |
|
|
|
3.70 |
|
| Granted |
|
|
960,224 |
|
|
|
4.87 |
|
| Exercised |
|
|
(118,039 |
) |
|
|
3.32 |
|
| Forfeited |
|
|
(254,247 |
) |
|
|
3.39 |
|
| Balance –December 31, 2021 |
|
|
1,941,769 |
|
|
|
4.24 |
|
| Granted |
|
|
34,500 |
|
|
|
1.14 |
|
| Exercised |
|
|
- |
|
|
|
- |
|
| Forfeited |
|
|
(18,813 |
) |
|
|
5.37 |
|
| Balance – June 30, 2022 |
|
|
1,957,456 |
|
|
|
4.17 |
|
During
the six months ended June 30, 2022, 34,500 stock options were granted by the Company. During the six months ended June 30, 2022, the
Company recorded share-based compensation of $884,322 (June 30, 2021 - $478,008) relating to options vested during the period.
During
the year ended December 31, 2021, 960,224 stock options were granted by the Company. During the year ended December 31, 2021, the Company
recorded share-based compensation of $2,145,928 relating to options vested during the period.
The
Company used the following assumptions in calculating the fair value of stock options for the period ended:
| |
|
|
June 30,
2022 |
|
|
|
December 31,
2021 |
|
| Risk-free interest rate |
|
|
2.14% – 2.91% |
|
|
|
0.04% -0.47% |
|
| Expected life of options |
|
|
5.0 years |
|
|
|
5.0 years |
|
| Expected dividend yield |
|
|
Nil |
|
|
|
Nil |
|
| Volatility |
|
|
96.90% – 98.70% |
|
|
|
102% - 128% |
|
At
June 30, 2022, the Company had incentive stock options outstanding as follows:
| Expiry Date |
|
Options Outstanding
|
|
|
Options Exercisable
|
|
|
Exercise Price
|
|
|
Weighted Average
Remaining Life |
|
| |
|
|
|
|
|
|
|
($) |
|
|
(years) |
|
| September 14, 2022 |
|
|
74,156 |
|
|
|
74,156 |
|
|
|
4.46 |
|
|
|
0.70 |
|
| June 6, 2023 |
|
|
14,063 |
|
|
|
14,063 |
|
|
|
5.70 |
|
|
|
1.43 |
|
| September 4, 2023 |
|
|
12,813 |
|
|
|
12,212 |
|
|
|
2.97 |
|
|
|
1.68 |
|
| April 2, 2024 |
|
|
106,875 |
|
|
|
106,875 |
|
|
|
2.52 |
|
|
|
2.26 |
|
| June 27, 2024 |
|
|
6,250 |
|
|
|
6,250 |
|
|
|
2.56 |
|
|
|
2.49 |
|
| September 27, 2024 |
|
|
300,000 |
|
|
|
206,250 |
|
|
|
4.53 |
|
|
|
2.74 |
|
| October 22, 2024 |
|
|
12,500 |
|
|
|
12,500 |
|
|
|
4.03 |
|
|
|
2.81 |
|
| July 24, 2025 |
|
|
242,095 |
|
|
|
242,095 |
|
|
|
2.98 |
|
|
|
3.57 |
|
| July 31, 2025 |
|
|
166,116 |
|
|
|
162,655 |
|
|
|
2.98 |
|
|
|
3.57 |
|
| August 10, 2025 |
|
|
12,500 |
|
|
|
11,458 |
|
|
|
2.98 |
|
|
|
3.61 |
|
| November 19, 2025 |
|
|
15,364 |
|
|
|
5,762 |
|
|
|
4.59 |
|
|
|
2.89 |
|
| June 1, 2026 |
|
|
56,816 |
|
|
|
56,816 |
|
|
|
7.04 |
|
|
|
4.47 |
|
| June 29, 2026 |
|
|
329,500 |
|
|
|
82,375 |
|
|
|
5.65 |
|
|
|
4.47 |
|
| August 19, 2026 |
|
|
573,908 |
|
|
|
233,150 |
|
|
|
4.20 |
|
|
|
3.7 |
|
| March 18, 2027 |
|
|
22,500 |
|
|
|
- |
|
|
|
1.32 |
|
|
|
5.00 |
|
| May 10, 2027 |
|
|
12,000 |
|
|
|
- |
|
|
|
0.79 |
|
|
|
5.00 |
|
| |
|
|
1,957,456 |
|
|
|
1,226,617 |
|
|
|
4.17 |
|
|
|
3.43 |
|
|
d) |
Share
purchase warrants |
A
continuity schedule of outstanding share purchase warrants is as follows:
| |
|
Number Outstanding |
|
|
Weighted Average Exercise Price |
|
| |
|
|
|
|
($) |
|
| Balance – December 31, 2020 |
|
|
2,692,622 |
|
|
|
3.61 |
|
| Exercised |
|
|
(1,088,713 |
) |
|
|
4.21 |
|
| Expired |
|
|
(492,461 |
) |
|
|
4.21 |
|
| Issued |
|
|
3,374,682 |
|
|
|
7.50 |
|
| Balance – December 31, 2021 |
|
|
4,486,130 |
|
|
|
6.83 |
|
| Exercised |
|
|
- |
|
|
|
- |
|
| Expired |
|
|
(2,015,008 |
) |
|
|
7.03 |
|
| Issued |
|
|
4,965,625 |
|
|
|
1.92 |
|
| Balance – June 30, 2022 |
|
|
7,436,747 |
|
|
|
2.21 |
|
During
the six month period ended June, 2022, the Company:
|
i) |
On
February 28, 2022, the Company completed a public offering and issued 4,375,000 units at a price of $1.60 per unit per unit for total
proceeds of $7,000,000. Each unit consisted of one common share and one warrant, to purchase one common share at $1.92 per share until
February 28, 2027. |
|
ii) |
On
March 24, 2022, the underwriter exercised its overallotment option, and the Company issued 590,625 units at a price of $1.48 per unit
for total proceeds of $874,125. Each unit consisted of one common share and one warrant, to purchase one common share at $1.92 per share
until February 28, 2027. |
During
the year ended December 31, 2021, the Company:
|
iii) |
On
January 21, 2021, Company completed a public offering and issued 1,472,000 units at a price of $7.50 per unit per unit for total proceeds
of $11,040,000. Each unit consisted of one common share, one Unit A warrant and one Unit B warrant, each to purchase one common share
for a total of 2,944,000 warrants issued at $7.50 per share until January 21, 2023. |
|
iv) |
On
January 21, 2021, the Company entered into a debt exchange agreement and exchanged 215,341 shares of common stock for the reduction of
$1,615,058 of debt and accrued interest. As part of the agreement the Company also issued 215,341 Unit A warrants and 215,341 Unit B
warrants issued at $7.50 per share until January 21, 2023. |
The
Company used the following assumptions in calculating the fair value of the warrants for the period ended:
| |
|
June 30,
2022 |
| Risk-free interest rate |
|
0.25% |
| Expected life of warrants |
|
0.7 – 1.76 years |
| Expected dividend yield |
|
Nil |
| Volatility |
|
75% |
| Weighted average fair value per warrant |
|
$3.38 |
At
June 30, 2022, the Company had share purchase warrants outstanding as follows:
| Expiry Date |
|
Warrants Outstanding
|
|
|
Exercise Price
|
|
|
Weighted Average Remaining Life |
|
| |
|
|
|
|
($) |
|
|
(years) |
|
| July 17, 2022 |
|
|
172,531 |
|
|
|
4.71 |
|
|
|
0.30 |
|
| November 17, 2022 |
|
|
611,250 |
|
|
|
4.89 |
|
|
|
0.53 |
|
| January 20, 2026 |
|
|
1,687,341 |
|
|
|
7.50 |
|
|
|
3.81 |
|
| February 28, 2027 |
|
|
4,965,625 |
|
|
|
1.92 |
|
|
|
4.91 |
|
| |
|
|
7,436,747 |
|
|
|
2.21 |
|
|
|
0.91 |
|
|