| 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 September 30, 2022, there
were 338 Class A Shares issued and outstanding.
During the nine-month period ended September 30, 2022, the Company:
|
i) |
Issued 291,667 units at a price of $24.00 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 $28.80 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 11,441 shares, which were converted from Versus Holdco
shares. |
|
iii) |
Issued 39,375 shares at a price of $22.20 per unit for total
proceeds of $874,125 as a result of the underwriter exercising the overallotment. |
|
iv) |
Issued 4,196 shares related to the Xcite acquisition and
the vesting of key employee shares. |
|
v) |
Issued 276,334 units at a price of $7.80 per unit for total
proceeds of $2,155,195. The offering consisted of 140,000 common shares and 136,334 pre-funded warrants. |
During the year ended December 31, 2021, the Company:
|
i) |
Issued 100,461 units at a price of $101.40 per unit in connection
with the acquisition of Xcite. |
|
ii) |
issued, 98,134 units at a price of $112.50 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 $112.50 per share until January 20, 2026. Unit B warrants allow the purchaser to
purchase one common share at $112.50 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, 103,559 common shares pursuant to exercise of 95,689
warrants and 7,870 stock options for total proceeds of $6,735,254. |
|
iv) |
issued, 14,357 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 1,954 shares of the Company’s common stock with
a value of $206,614 to a third party in exchange for services (included in professional fees). |
Escrow
At September 30, 2022, 21 common shares
(December 31, 2021 – 21) of the Company are held in escrow due to misplaced share certificates originally issued to three individual
shareholders.
The Company may grant incentive stock
options to its officers, directors, employees, and consultants. The Company has implemented a rolling Stock Option Plan (the “Plan”)
whereby the Company can issue up to 10% of the issued and outstanding common shares of the Company. Options have a maximum term of ten
years and vesting is determined by the Board of Directors.
|
A |
continuity schedule of outstanding stock options is as follows: |
| |
|
Number
Outstanding |
|
|
Weighted Average
Exercise Price |
|
| |
|
|
|
|
($) |
|
| Balance – December 31, 2020 |
|
|
90,255 |
|
|
|
55.50 |
|
| Granted |
|
|
64,015 |
|
|
|
73.05 |
|
| Exercised |
|
|
(7,869 |
) |
|
|
49.80 |
|
| Forfeited |
|
|
(16,950 |
) |
|
|
50.85 |
|
| Balance –December 31, 2021 |
|
|
129,451 |
|
|
|
63.60 |
|
| Granted |
|
|
104,517 |
|
|
|
6.19 |
|
| Exercised |
|
|
|
|
|
|
|
|
| Forfeited |
|
|
(6,198 |
) |
|
|
69.60 |
|
| Balance – September 30, 2022 |
|
|
227,770 |
|
|
|
37.13 |
|
| |
|
|
|
|
|
|
|
|
During the nine months ended September
30, 2022, 104,517 stock options were granted by the Company. During the nine months ended September 30, 2022, the Company recorded share-based
compensation of $1,255,588 (September 30, 2021 - $1,403,132) relating to options vested during the period.
During the year ended December 31,
2021, 64,015 stock options were granted by the Company. During the year ended December 31, 2021, the Company recorded share-based compensation
of $2,145,928 relating to options vested during the period.
The Company used the following assumptions in calculating
the fair value of stock options for the period ended:
| |
|
September 30,
2022 |
|
December 31,
2021 |
| Risk-free interest rate |
|
2.14% – 4.03% |
|
0.04% -0.47% |
| Expected life of options |
|
5.0 years |
|
5.0 years |
| Expected dividend yield |
|
Nil |
|
Nil |
| Volatility |
|
96.90% – 112.40% |
|
102% - 128% |
At September 30, 2022, the Company
had incentive stock options outstanding as follows:
| Expiry Date |
|
Options
Outstanding |
|
|
Exercise
Price |
|
|
Weighted Average
Remaining Life |
|
| |
|
|
|
|
($) |
|
|
(years) |
|
| June 6, 2023 |
|
|
937 |
|
|
|
85.50 |
|
|
|
1.18 |
|
| September 4, 2023 |
|
|
854 |
|
|
|
44.55 |
|
|
|
1.43 |
|
| April 2, 2024 |
|
|
7,125 |
|
|
|
37.80 |
|
|
|
2.01 |
|
| June 27, 2024 |
|
|
417 |
|
|
|
38.40 |
|
|
|
2.24 |
|
| September 27, 2024 |
|
|
20,000 |
|
|
|
67.95 |
|
|
|
2.49 |
|
| October 22, 2024 |
|
|
833 |
|
|
|
60.45 |
|
|
|
2.56 |
|
| July 24, 2025 |
|
|
16,140 |
|
|
|
44.70 |
|
|
|
3.32 |
|
| July 31, 2025 |
|
|
11,074 |
|
|
|
44.70 |
|
|
|
3.32 |
|
| August 10, 2025 |
|
|
833 |
|
|
|
44.70 |
|
|
|
3.36 |
|
| November 19, 2025 |
|
|
1,024 |
|
|
|
68.85 |
|
|
|
2.64 |
|
| June 1, 2026 |
|
|
3,788 |
|
|
|
105.60 |
|
|
|
4.22 |
|
| June 29, 2026 |
|
|
21,967 |
|
|
|
84.75 |
|
|
|
4.22 |
|
| August 19, 2026 |
|
|
38,261 |
|
|
|
63.00 |
|
|
|
3.45 |
|
| March 18, 2027 |
|
|
1,500 |
|
|
|
19.80 |
|
|
|
4.50 |
|
| May 10, 2027 |
|
|
800 |
|
|
|
11.85 |
|
|
|
4.80 |
|
| August 17, 2027 |
|
|
99,977 |
|
|
|
6.00 |
|
|
|
5.00 |
|
| September 20, 2027 |
|
|
2,240 |
|
|
|
3.45 |
|
|
|
5.00 |
|
| |
|
|
227,770 |
|
|
|
37.13 |
|
|
|
4.07 |
|
|
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 |
|
|
179,509 |
|
|
|
54.15 |
|
| Exercised |
|
|
(72,581 |
) |
|
|
63.15 |
|
| Expired |
|
|
(32,830 |
) |
|
|
63.15 |
|
| Issued |
|
|
224,979 |
|
|
|
112.50 |
|
| Balance – December 31, 2021 |
|
|
299,077 |
|
|
|
102.45 |
|
| Exercised |
|
|
- |
|
|
|
- |
|
| Expired |
|
|
(145,838 |
) |
|
|
102.75 |
|
| Issued |
|
|
745,542 |
|
|
|
21.30 |
|
| Balance – September 30, 2022 |
|
|
898,781 |
|
|
|
31.61 |
|
During the nine-month period ended September 30, 2022, the
Company:
|
i) |
Completed a public offering on February 28, 2022, and issued
291,666 units at a price of $24.00 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 $28.80 per share until February 28, 2027. |
|
ii) |
Issued 39,375 units on March 24, 2022, at a price of $22.20
per unit for total proceeds of $874,125 because the underwriter exercised its overallotment option. Each unit consisted of one common
share and one warrant, to purchase one common share at $28.80 per share until February 28, 2027. |
|
iii) |
Issued 414,500 warrants on July 18, 2022, to purchase common
shares, each exercisable for one common share at an exercise price of $7.80 per share in an offer to an investor. |
During the year ended December 31, 2021, the Company:
|
iv) |
On January 21, 2021, Company completed a public offering
and issued 98,134 units at a price of $112.50 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 196,267 warrants issued at $112.50
per share until January 21, 2023. |
|
v) |
On January 21, 2021, the Company entered into a debt exchange
agreement and exchanged 14,357 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 14,357 Unit A warrants and 14,357 Unit B warrants issued at $112.50 per share until January 21, 2023. |
The Company used the following assumptions
in calculating the fair value of the warrants for the period ended:
| |
|
September 30,
2022 |
|
| Risk-free interest rate |
|
|
0.25% - 4.02% |
|
| Expected life of warrants |
|
|
0.2 – 5.25 years |
|
| Expected dividend yield |
|
|
Nil |
|
| Volatility |
|
|
75% - 100.5% |
|
| Weighted average fair value per warrant |
|
$ |
32.64 |
|
At September 30, 2022, the Company
had share purchase warrants outstanding as follows:
| Expiry Date |
|
Warrants Outstanding
|
|
|
Exercise Price
|
|
|
Weighted
Average
Remaining Life |
|
| |
|
|
|
|
($) |
|
|
(years) |
|
| November 17, 2022 |
|
|
40,750 |
|
|
|
73.35 |
|
|
|
0.28 |
|
| January 20, 2026 |
|
|
112,489 |
|
|
|
112.50 |
|
|
|
3.56 |
|
| February 28, 2027 |
|
|
331,042 |
|
|
|
28.80 |
|
|
|
4.41 |
|
| July 18, 2028 |
|
|
414,500 |
|
|
|
7.80 |
|
|
|
5.00 |
|
| |
|
|
898,781 |
|
|
|
31.61 |
|
|
|
4.39 |
|
|