| 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, 2023, there
were 338 Class A Shares issued and outstanding.
b) Issued share capital
During the nine month period ended
September 30, 2023, the Company:
|
i) |
Issued 2,500,000 shares at a price of $0.90 per share for total proceeds of $2,250,000 in a registered
direct offering. In connection with the offering, the Company incurred $226,544 in issuance costs as part of the transaction. |
|
ii) |
Issued 4,042,000 common shares pursuant to exercise of 4,042,000 warrants
at a price of $1.10 per share for total proceeds of $4,446,200. |
Escrow
At September 30, 2023, 21 common shares
(December 31, 2022 – 21) of the Company are held in escrow due to misplaced share certificates originally issued to three individual
shareholders.
During the year ended December 31,
2022, the Company:
|
i) |
Issued 291,667 units at a price of $24.00 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. In connection with the offering, the Company incurred $313,482 in issuance costs
as part of the transaction. |
|
vi) |
Issued 412,293 shares at $2.72 per share in a private placement offering for total proceeds of $1,119,373. |
|
vii) |
Issued 2,100,000 units at a price of $1.00 per unit for total proceeds of $2,099,866. The offering consisted
of 300,000 common shares and 1,800,000 pre-funded warrants. In connection with the offering, the Company incurred $522,460 in issuance
costs as part of the transaction. |
c) Stock
options
The Company may grant incentive stock
options to its officers, directors, employees, and consultants. The Company has implemented a rolling Stock Option Plan (the “Plan”)
whereby the Company can issue up to 10% of the issued and outstanding common shares of the Company. Options have a maximum term of ten
years and vesting is determined by the Board of Directors.
A continuity schedule of outstanding
stock options is as follows:
| |
|
Number
Outstanding |
|
|
Weighted Average
Exercise Price |
|
| |
|
|
|
|
($) |
|
| Balance –December 31, 2021 |
|
|
129,451 |
|
|
|
63.60 |
|
| Granted |
|
|
104,520 |
|
|
|
6.19 |
|
| Exercised |
|
|
- |
|
|
|
- |
|
| Forfeited |
|
|
(6,183 |
) |
|
|
92.81 |
|
| Balance –December 31, 2022 |
|
|
227,788 |
|
|
|
37.13 |
|
| Granted |
|
|
400,000 |
|
|
|
0.90 |
|
| Exercised |
|
|
- |
|
|
|
- |
|
| Forfeited |
|
|
(157,654 |
) |
|
|
25.47 |
|
| Balance – September 30, 2023 |
|
|
470,134 |
|
|
|
10.21 |
|
During the nine months ended September
30, 2023, 400,000 stock options were granted by the Company. During the nine months ended September 30, 2023, the Company recorded a share-based
compensation adjustment of ($1,154,308) (September 30, 2022 - $1,255,588) relating to options forfeited as a result of the Company’s
corporate restructuring in January 2023.
During the year ended December 31,
2022, 104,520 stock options were granted by the Company. During the year ended December 31, 2022, the Company recorded share-based compensation
of $1,567,583 relating to options vested during the period.
The Company used the following assumptions in calculating
the fair value of stock options for the period ended:
| |
|
September 30,
2023 |
|
December 31,
2022 |
| Risk-free interest rate |
|
3.93% |
|
2.14% – 4.03% |
| Expected life of options |
|
5.0 years |
|
5.0 years |
| Expected dividend yield |
|
Nil |
|
Nil |
| Volatility |
|
132.65% |
|
96.90% – 112.40% |
At September 30, 2023, the Company
had incentive stock options outstanding as follows:
| Expiry Date |
|
Options Outstanding
|
|
|
Exercise Price
|
|
|
Weighted Average
Remaining Life |
|
| |
|
|
|
|
($) |
|
|
(years) |
|
| April 2, 2024 |
|
|
6,877 |
|
|
|
37.80 |
|
|
|
0.50 |
|
| June 27, 2024 |
|
|
417 |
|
|
|
38.40 |
|
|
|
0.75 |
|
| September 27, 2024 |
|
|
15,418 |
|
|
|
67.95 |
|
|
|
1.00 |
|
| October 22, 2024 |
|
|
834 |
|
|
|
60.45 |
|
|
|
1.08 |
|
| July 24, 2025 |
|
|
8,873 |
|
|
|
44.70 |
|
|
|
1.83 |
|
| July 31, 2025 |
|
|
8,761 |
|
|
|
44.70 |
|
|
|
1.83 |
|
| August 10, 2025 |
|
|
833 |
|
|
|
44.70 |
|
|
|
1.92 |
|
| June 1, 2026 |
|
|
3,788 |
|
|
|
105.60 |
|
|
|
2.67 |
|
| June 29, 2026 |
|
|
700 |
|
|
|
84.75 |
|
|
|
2.75 |
|
| August 19, 2026 |
|
|
23,990 |
|
|
|
63.00 |
|
|
|
2.92 |
|
| May 10, 2027 |
|
|
230 |
|
|
|
11.85 |
|
|
|
3.67 |
|
| August 17, 2027 |
|
|
51,465 |
|
|
|
6.00 |
|
|
|
3.92 |
|
| September 20, 2027 |
|
|
2,240 |
|
|
|
3.45 |
|
|
|
4.00 |
|
| February 13, 2028 |
|
|
345,708 |
|
|
|
0.90 |
|
|
|
4.50 |
|
| |
|
|
470,134 |
|
|
|
10.21 |
|
|
|
4.05 |
|
d) Share purchase
warrants
A continuity schedule of outstanding
share purchase warrants is as follows:
| |
|
Number |
|
|
Weighted Average Exercise Price |
|
| |
|
Outstanding |
|
|
($) |
|
| Balance – December 31, 2021 |
|
|
299,077 |
|
|
|
102.45 |
|
| Exercised |
|
|
- |
|
|
|
- |
|
| Expired |
|
|
(186,586 |
) |
|
|
96.30 |
|
| Issued |
|
|
5,166,044 |
|
|
|
3.42 |
|
| Balance – December 31, 2022 |
|
|
5,278,535 |
|
|
|
5.74 |
|
| Exercised |
|
|
(4,042,000 |
) |
|
|
1.10 |
|
| Expired |
|
|
- |
|
|
|
- |
|
| Issued |
|
|
175,000 |
|
|
|
0.90 |
|
| Balance – September 30, 2023(1) |
|
|
1,411,535 |
|
|
|
18.44 |
|
| (1) | Unit A warrant balance is 1,687,341 as of September 30, 2023; however, table above reflects 15:1 post-consolidated common shares to be issued and exercise price upon the exercise of the warrants. |
During the nine month period ended September 30, 2023, the
Company:
|
i) |
Issued 175,000 placement agent warrants in conjunction with a registered direct offering on February 2,
2023, with an exercise price of $0.90 per share. |
During the year ended December 31, 2022, the Company:
|
i) |
Completed a public offering on February 28, 2022, and issued 291,669
units at a price of $24.00 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. |
|
iv) |
Completed a public offering on December 9, 2022 and issued 2,100,000 units for total proceeds of $2,099,866.
Each unit consists of (1) either (a) one common share or (b) one pre-funded warrant to purchase one common share and (2) two warrants
to purchase one common share each, at a public offering price of $1.00 per unit. The unit will have an exercise price of $1.10 per share,
are exercisable immediately upon issuance, and will expire five years following the date of issuance. An additional 220,500 warrants were
provided to placement agents with an exercise price of $1.25 per share. |
The Company used the following assumptions
in calculating the fair value of the warrants for the period ended:
| |
|
September 30,
2023 |
| Risk-free interest rate |
|
4.13% - 4.49% |
| Expected life of warrants |
|
2.58 – 4.67 years |
| Expected dividend yield |
|
Nil |
| Volatility |
|
132.78% |
| Weighted average fair value per warrant |
|
$0.21 |
At September 30, 2023, the Company
had share purchase warrants outstanding as follows:
| Expiry Date |
|
Warrants Outstanding
|
|
|
Exercise Price
|
|
|
Weighted Average Remaining Life |
|
| |
|
|
|
|
($) |
|
|
(years) |
|
| January 20, 2026(1) |
|
|
112,491 |
|
|
|
112.50 |
|
|
|
2.33 |
|
| February 28, 2027 |
|
|
331,044 |
|
|
|
28.80 |
|
|
|
3.42 |
|
| December 6, 2027 |
|
|
220,500 |
|
|
|
1.25 |
|
|
|
4.17 |
|
| December 9, 2027 |
|
|
158,000 |
|
|
|
1.10 |
|
|
|
4.17 |
|
| January 18, 2028 |
|
|
414,500 |
|
|
|
7.80 |
|
|
|
4.33 |
|
| February 2, 2028 |
|
|
175,000 |
|
|
|
0.90 |
|
|
|
4.42 |
|
| |
|
|
1,411,535 |
|
|
|
18.44 |
|
|
|
3.92 |
|
| (1) | Unit A warrant balance is 1,687,341 as of September 30, 2023; however, the table above reflects 15:1 post-consolidated common shares to be issued and exercise price upon the exercise of the warrants. |
|